Monday, November 28

Domestic cement dispatches grew by 15.42% during 2017-2018

Karachi: The cement industry ended fiscal 2017-18 on a jubilant note, posting yearly growth of 13.84%; with domestic consumption increasing by 15.42% and exports inching up by 1.77% – first time in nine years that exports registered growth.

According to data released by All Pakistan Cement Manufacturers’ Association (APCMA), during the fiscal year 2017-2018, domestic consumption stood at 41.147 million tons, an increase of 15.42% from 35.651 million tons in 2016-2017. However, exports grew by only 1.77% from 4.664 million tons in 2016-207 to 4.746 million tons during 2017-2018.

In the month of June, the total cement dispatches were 2.979 million tons. Out of this, local dispatches in the North were 2.158 million tons against 1.897 million tons in June 2017 reflecting growth of 13.77%. Cement dispatches in Southern half amounted to 0.423 million tons against 0.485 million tons in June 2017, reflecting negative growth of 12.79%. The exports from North based mills amounted to 0.183 million tons against 0.223 million tons in June 2017 and from South based mills was 0.215 million tons against 0.122 million tons in June 2017.

The industry dispatched 45.893 million tons of cement in 2017-18 against 40.315 million tons dispatched in 2016-17. This is the highest ever growth posted by the industry in its history. In fact, the past five years have been positive for the cement industry of Pakistan as annual dispatches increased by 12.46 million tons from 33.43 million tons in 2012-13 to 45.89 million tons in 2017-18. The year 2017-18 has witnessed particularly buoyant times as dispatches grew by 5.5 million tons.

If viewed month wise, dispatches in June 2018 were the lowest in 12 months. This was the only month in which total dispatches were just below three million tons. However, at 2.9 million tons, this was still 9.25% higher than June 2017. During the remaining eleven months, dispatches breached the 4 million tons level three times and remained much above 3 million tons in the remaining eight months.

It is worth noting that cement exports have been declining since 2008-09. Even in the first seven months of 2017-18 the exports were declining steeply. The turnaround started in February this year with a growth of 18.41% followed by massive jumps of 84.90 and 81.39% in March and April and then by 41.88% in May and 15.33% in June 2018. It was because of this massive growth in last five months of last fiscal that the negative trend of first seven months turned into a positive export growth of 1.77%. Pakistan exported 4.7 million tons cement in fiscal year 2017-18.

The industry increased its production capacity by 6.58% during 2017-18 and its capacity utilization stood at 92.82%, the highest since 1992-93 when its total production capacity was only 8.89 million tons compared with 49.44 million tons in 2017-18.

Spokesman of APCMA has said that reinvigorated increase in exports is a welcome sign for the industry and the decline in rupee value against dollar is finally restoring lost competitiveness of cement sector in the global markets.

However, APCMA said that rising input cost, especially coal and fuel prices is hurting the local industry.

“We urge the government to provide relief to the cement sector by reducing duties and taxes providing further boom in local consumption while also making the commodity more competitive on the global front, boosting export potential,” he added.