Karachi: Cement sector has witnessed a sales boom for the last four years, more so this fiscal as total despatches reached 22.243 million tons in July-December 2017 against 19.806 million tons during corresponding period of last fiscal.
According to data released by All Pakistan Cement Manufacturers’ Association (APCMA), in first six months of this fiscal the domestic consumption stood at 19.836 million tons, an increase of 17.41 percent from 16.895 million tons in July-Dec 2016. However, the continued decline in exports affected overall growth as exports dropped by 17.34 percent from 2.911 million tons in July-Dec 2016 to 2.406 million tons during the same period this year.
The cement units located in Punjab and Khyber Pakhtunkhwa despatched 16.455 million tons cement locally in July-December 2017, which is 18.12 percent higher than 13.930 million tons local despatched in the same period last year. The cement units located in Sindh and Baluchistan despatched 3.382 million tons cement locally in July-December 2017, which is 14.06 percent higher than 2.965 million tons local despatches in the same period last year.
However, what is alarming is that exports from South based mills took a major hit as same went down by 36.23 percent from 0.953 million tons in July-December 2016 to 0.608 million tons in July-December 2017. Exports from Northern region also decreased by 8.14 percent to 1.799 million tons during July-Dec 2017 from 1.958 million tons in same period last year.
Exports are down not only because of high cost of doing business but also due to the lax attitude of the regulators who are ignoring malpractices in imports and plea of the cement manufacturers to cut down duties and taxes on exports helping the local industry to compete globally.
“The sector is performing well and contributing a hefty amount to the national exchequer, which perhaps is the reason for complacency of the government,” said the spokesperson of APCMA.
The government ignored the timely warnings given by the cement manufacturers for making policy changes to ensure sustained exports and now it is looking the other way as cement manufacturers regularly complained about smuggling and under invoicing, he added.
The government must realize that inroads in Pakistani markets by foreign brands through illegal channels would encourage them to increase this activity which is getting out of control, especially since no authority is even bothered to check the quality of imports as is done on our exports going to India, Sri Lanka and African countries.
In December 2017 the industry despatched 3.730 million tons cement which was 4.94 percent higher than the despatches of 3.555 million tons in the corresponding month of last year.
In December 2017, exports decreased by 11.25 percent to 0.328 million tons as compared to 0.369 million tons in December last year, whereas local despatches increased by 6.82 percent from 3.185 million tons in December 2016 to 3.403 million tons in December 2017.