Cement sector continues good domestic offtake in July

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Cement despatches to domestic markets during July 2016 were 2.018 million tonnes compared to 1.8 million tonnes during the same month of last year showing an increase of 12.38 per cent and indicating continuity of the growth momentum. Exports during July 2016 were 465,102 tonnes against 465,369 tonnes during July 2015 showing a slight reduction of 0.06 per cent. Total despatches during July 2016 were 2.483 million tonnes compared to 2.26 million tonnes during the same month the previous year showing an increase of 9.82%.

Healthy offtake was observed in domestic despatches during July 2016 despite heavy rains that seriously affected construction activities in many parts of the country. Domestic despatches in North Zone were 1.667 million tonnes (July 15: 1.517 million tonnes) and in South Zone were 0.351 million tonnes (July 15: 0.279 million tonnes). The manufacturing units of North region of the country registered growth both in local despatches and exports at 9.85 % and 11.82 %, respectively, while the South region units registered 26.15 % local growth but faced decline of 17.02 % in exports.

Quantitatively, during July 2016, exports from the North zone were 306,000 tonnes while exports from South zone were 159,000 tonnes. In July 2015 the cement exports from North were 274,000 tonnes while from South the exports were 192,000 tonnes. During July 2016, exports to Afghanistan declined to 149,666 tonnes (-15.87%) compared to 177,900 tonnes during July 2015. Exports by sea also substantially reduced to 177,492 tonnes (-27.43%) during July 2016 against 244,590 tonnes during July 2015.

The APCMA spokesman said that the exports are on continuous decline for the last few years as it registered 2.84 % negative growth in 2013-14, negative growth of 11.57 % in 2014-15, and negative growth of 18.38 % in 2015-16.

“This should be a concern for the government. The government should support local manufacturers to compete globally by giving them freight/transportation subsidy and other incentives to promote exports.”

He said that influx of smuggled Iranian cement into Balochistan and other coastal areas is another major issue and so far, the government has not taken any significant steps to curb the smuggling. “The cement industry loses approximately one million tonnes of volume annually due to smuggled Iranian cement,” he added.