Strong domestic consumption leads growth in cement production




Cement industry has recorded its highest ever despatches of 3.584 million tonnes during March 2016 on the strength of healthy growth in domestic consumption and turnaround in exports; enabling it to utilise more than 90 per cent of installed capacity during the month. While buoyancy in the domestic market has remained the main feature of cement growth, the turnaround in exports is an icing on the cake.

Cement despatches to domestic markets during the month of March increased by 19.13% to 3.05 million tonnes compared with 2.56 million tonnes during the same month last year. The exports which dropped by double digits in the first seven months of this fiscal year and showed a marginal growth of 1.47% during February, registered an impressive growth of 20.58 per cent during March as the quantity increased to 534,804 tonnes compared to 443,539 tonnes during March 2015. Total despatches during March were 3.583 million tonnes compared to 3 million tonnes during same month last year showing a healthy increase of 19.34%.

The domestic sales in north during March were 2,460,109 tonnes compared to the domestic sales of 2,074,322 tonnes during the same month last year showing growth of 18.6%. The local sales in South during March were 588,898 tonnes compared to the local sales of 485,088 tonnes during the same month last year showing growth of 21.4%. This shows that the economic activity has picked up in all regions of the country.

Analyzing the overall situation of current fiscal year, the statistics show that during July 2015 to March 2016, the cement industry despatched 23.94 million tonnes in local markets posting a healthy growth of 17.69% compared with local despatches during the same period of the last fiscal year which were 20.34 million tonnes. Exports from the country declined by 19.02% to 4.406 million tonnes compared with exports during the first 9 months of the previous year which were 5.44 million tonnes. The overall situation during the first three quarters of the current fiscal year showed 9.95% of growth compared to the same period of the previous fiscal year as total despatches increased to 28.34 million tonnes against 25.78 million tonnes from July 14 to March 15.

With regard to the turnaround in exports, spokesman of All Pakistan Cement Manufacturers’ Association said the growth in cement exports in March is very encouraging for the industry. He said this enabled the industry to utilise almost 95 per cent of its installed capacity. He said the industry has full faith in the economy of the country and it has kept on increasing its capacity on regular basis, while further increase in capacity to the tune of around 26,000 tonnes per day is expected to be available after the commencement of DG Khan, Lucky, Cherat and Attock Cement expansions. Other major players are also working on expansion plans – the spokesman added.

The spokesman of APCMA regretted that despite the utilisation of around 95 per cent capacity, the industry is being accused of not using their idle capacity and of forming a cartel to keep the rates high. He said the two factors that prove this accusation as baseless are the utilisation of installed capacity to the maximum and the difference in maximum retail prices in different regions of the country which range from Rs 482 per bag to Rs 550 per bag. “The industry is neither managing despatches nor the prices and is operating on the principles of free market economy,” he asserted.