H1 cement exports down 5 percent

RIZWAN BHATTI

KARACHI: The country's cement exports fell by some 5 percent during the first half of current fiscal year due to slow external demand.

Industry sources said cement exports stood at 4.458 million tons during July-Dec of fiscal year 2011-12 compared with 4.672 million tons in the same period of last fiscal year 2010-11, depicting a decline of 4.58 percent or 0.214 million tons.

However, the cement export data revealed that December 2011 is very encouraging for the cement sector as the exports have registered some increase. Month-on-month basis, cement exports posted an increase of 5.2 percent during December 2011 compared with November 2011.

With an increase of 32,172 tons, the cement export dispatches surged to 0.649 million tons in December as against the export dispatches of 0.617 million tons in November 2011. Cement exports in December 2011 also registered a decline of 8 percent when compared with December 2010, in which exports stood at 0.708 million tons.

"Cement industry is struggling on exports front as the total export dispatches are declining owing to prolonged economic slowdown leading to lower construction activities most of the importing channels," analysts said.

They said some 22.73 percent decline has been noted in "through sea" segment of exports. While, exports to the Afghanistan and India registered a substantial increase during the first half.

Currently, India and Afghanistan are major export markets for the cement sector and exports to these two countries are rising gradually. Cement prices in India are very high, they added.

As per the industry data, total industry dispatches (including local and export) witnessed a rise of 4 percent to 15.402 million tons in first half of fiscal year 2012 as against total dispatches of 14.78 million tons in the corresponding period last year.

The growth in overall dispatches has been attributed to the 8 percent upsurge in local dispatches as these reached 10.95 million tons in July-Dec of fiscal year 2012 against the local dispatches of 10.11 million tons in the same period last year.

Local dispatches were higher in North Zone ie by 6 percent to 8.95 million and in South Zone by 19 percent to 2.00 million tons during the period under review. Sources said due to better price in the local market, the cement makers are also focusing on local sales.

Month-on-month basis local dispatches in December 2011 posted a substantial rise of 24 percent - 2.04 million tons compared with 1.65 million tons local dispatches in November 2011.

During the period under review, export of clinker witnessed 100 percent decline as not a single ton of clinker was exported.

Analysts are expecting more growth in the dispatches during the current fiscal year. "We expect this fiscal year will be a lucky year for the cement industry as cement prices in the country are persistently on rise and so far price of a 40-kg bag has reached Rs 423 per bag from Rs 339 per bag in same period last year," they said.

In addition, cement sector's major raw material (coal) prices are also on decline in international front, which will help the industry to perform well. Coal prices which hovered around $123 per ton in September 2011 have declined to $112 per ton in December 2011.