KARACHI – Cement manufacturers have said that the country’s cement exports and dispatches declined, respectively, by 14.46 and 7.86 percent during first nine months of the current fiscal year.
According to data released by All Pakistan Cement Manufacturers Association (APCMA), cement dispatches during July-March FY11 amounted to 16.017 million tonnes, showing a decline of 7.86 percent when compared to dispatches of 17.383 million tonnes achieved during the corresponding period last year.
The APCMA data revealed that cement units located in the north posted a hefty fall of 12.06 percent during this period, while cement units located in the southern region of the country posted a gain of 17.41 percent. The overall decline in exports was 14.46 percent being 6.724 million tonnes, against exports of 7.860 million tonnes during the corresponding period, last year.
However, exports to the war-torn Afghanistan increased by over 16 percent from 2.820 million tonnes to 3.277 million tonnes while exports to India declined by 22.39 percent during the first three quarters of this fiscal period to 0.382 million tonnes. Cement exports to other international destinations via ocean channels declined by 32.69 percent to 2.905 million tonnes.
Last month, total cement dispatches stood at 2.223 million tonnes showing a decline of 3.76 percent against dispatches of 2.310 million tons in March the previous year. Cement exports in March 2011 declined by 11.83 percent to 0.820 million tons when compared with the corresponding month of last year.
Capacity utilisation in the cement sector during first nine months of this fiscal dropped precipitously to 73.53 percent which is the lowest since 2004-05 when the sector utilised capacity of up to 91.32 percent on the back of cement sales decline by almost 10 percent.
Industry experts fear a near total collapse of the sector if immediate remedial steps are not taken. They said that the decline in domestic sales of cement is due to subdued economic activity. However, they said as the global economy shows improved signs of recovery, the decline of 14.46 percent in cement exports should be a matter of grave concern for the economic managers of the country.
They said cement exports showed robust growth of 140 percent in 2007-8 and over 39 percent in 2008-09 – the two years when the global recession was at its peak. “There is huge demand for cement in neighboring India,” said an analyst adding the main reason is high transportation cost from upcountry (where most cement plants are located) to sea ports.
Moreover, he added, the failure on the part of the government to convince India to allow Pakistani trucks carrying cement to cross the Wagah border has denied the country a lucrative market that could earn the country at least $1.0 billion every year. Withdrawal of freight subsidy to offset high transportation costs from upcountry has also contributed to loss of exports.
A spokesman for All Pakistan Cement Manufacturers Association (APCMA) also denied the notion of any collusion behind the rise in cement prices and pointed out that most of its member companies have incurred huge losses after a substantial rise in the cost of production.
