Cement sector registers 15 percent growth in 10 months

Bullish trend in cement despatches continued unabated in April 2018 and buoyancy in exports proved icing on the cake as exports increased for the second month by over 81 percent and sector posted highest capacity utilization. According to data released by All Pakistan Cement Manufacturers Association (APCMA), the industry despatched 4.237 million tons of cement in April 2018 that was 17.46 percent higher than the despatches of 3.576 million tons achieved during the corresponding month of last fiscal.
The domestic consumption was 3.772 million tons out of which 3.111 million tons was consumed in the Northern part and 0.661 million tons was consumed in the Southern part of the country, reflecting a growth of 13.62 percent. Cement exports surged to 0.465 million tons that was 81.4 percent higher than the exports during the corresponding period of last year.
The overall despatches during the first 10 months of this fiscal was 38.996 million tons compared with 33.880 million tons of cement despatched during the same period last year posting a growth of 15.10 percent. The mills from Northern region despatched 28.999 million tons cement for domestic consumption that was 18.69 percent higher than last year.
The North Zone exported 2.674 million tons of cement during this period that was 1.27 percent less than last year. The mills located in the South Zone despatched 6.087 million tons of cement for domestic consumption that was 11.94 percent higher than last year and exported 1.236 million tons cement which was 5.04 percent less than last year.
Spokesman of APCMA said that the upsurge in consumption is encouraging for the economy as this commodity basically improves the infrastructure and reduces housing deficit in the country, however, the recent increase in Federal Excise Duty (FED) will hurt the local consumption as this will have an impact of Rs 15 per bag.
"The industry in its budget proposals over the years demanded to abolish the FED as cement is not a luxury item and FED is always placed on items to discourage its usage," the spokesman added. "Increase in cement exports is a good omen, however, the major factor behind it is substantial decline in the rupee value against the US dollar that improved the competitiveness of cement in the global market. "The exports could further increase if the government accepts industry demands for reducing duties on inputs like coal and power," he added. "The government should decrease the taxes and FED on cement not only to keep us competitive in global market but also boost local consumption which will be negatively impacted due to less allocation for PSDP in the budget," he added.