Cement capacity utilisation touches 95%

LAHORE: The cement sector has witnessed a sales boom for the last four years and this fiscal was no different as total dispatches reached 22.243 million tons in July-December 2017 against 19.806 million tons during corresponding period of the previous fiscal year.

According to data released by All Pakistan Cement Manufacturers’ Association (APCMA), domestic consumption stood at 19.836 million tons in the first six months of FY18, an increase of 17.41% from 16.895 million tons in July-Dec 2016.

However, the continuous decline in exports affected overall growth as foreign shipments dropped by 17.34% from 2.911 million tons in July-Dec FY17 to 2.406 million tons during the same period this fiscal year.

Cement units located in Punjab and Khyber-Pakhtunkhwa dispatched 16.455 million tons locally in July-December 2017, which is 18.12% higher than 13.930 million tons of local dispatches in the same period last year. Cement units located in Sindh and Balochistan dispatched 3.382 million tons locally in July-December 2017, up 14.06% from 2.965 million tons dispatched locally in the same period last year.

However, it is alarming that exports from mills in southern parts of the country took a major hit, reducing by 36.23% from 0.953 million tons in July-December 2016 to 0.608 million tons in July-December 2017.

Exports from plants in the northern regions also decreased by 8.14% 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 regulators who are ignoring malpractices in imports and pleas of cement manufacturers to cut down duties and taxes on exports to help the local industry compete globally, said a spokesman in a statement released by the APCMA.

“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.

The government ignored timely warnings given by 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 realise 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,” he stated.

In December 2017 the industry dispatched 3.73 million tons cement which was 4.94% higher than dispatches of 3.555 million tons in the corresponding month of last year.

In December 2017, exports decreased by 11.25% to 0.328 million tons as compared to 0.369 million tons in December last year, whereas local dispatches increased by 6.82% from 3.185 million tons in December 2016 to 3.403 million tons in December 2017.

Published in The Express Tribune, January 5th, 2018.

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