Cement industry reports healthy growth

Lahore – All Pakistan Cement Manufacturers Association has expressed dismay at the indifference shown by the economic planners towards rapidly declining export market.The APCMA spokesperson referred to the latest despatches statistics of cement covering the first seven months of this fiscal. According to the data released by All Pakistan Cement Manufacturers Association, domestic consumption of cement increased in double digits during the past four months while exports entered the sixth month of heavy decline in double digits calling for serious attention from the policy makers. Substantial reduction in exports has drastically affected foreign exchange earnings of the country and cement makers are finding it difficult to maintain their existence in export markets due to high cost of doing business in Pakistan and non-availability of export incentives.Cement despatches from July 15 to Jan 16 increased by 6.38 percent to 21.3 million tons compared to 20.022 million tons during the corresponding period of last fiscal year. This positive figure in overall growth is attributed to the robust growth in domestic despatches during this period. The local despatches increased to 17.9 million Tons from July 15 to Jan 16 against 15.5 Million Tons during same period of last fiscal indicating an increase of 15.57%. Contrary to this, exports declined to 3.4 Million Tons from July 15 to Jan 16 against 4.5 Million Tons from July 14 to Jan 15 i.e. by 24.98%.

Further analyzing the despatches, factories located in north despatched 14.776 Million Tons in local markets from July 15 to Jan 16 against 12.948 Million Tons during same period of last fiscal year depicting growth of 14.12 percent. The South based factories registered even more growth of 23 percent in domestic despatches from July 15 to Jan 16 as their local sales recorded in this period were 3.12 Million Tons against 2.53 Million Tons during same period last year. In exports, the North based mills registered decline of 22.35 percent as exports were restricted to 2.16 million tons in first seven months of this fiscal against 2.782 Million Tons during July 14 to Jan 15. South based factories also suffered reduction in exports during first seven months of current fiscal year by 29.17 percent to 1.243 million tons from 1.756 Million Tons in corresponding period of last fiscal year.The industry despatched 3.085 million tons of cement during January 2016 compared with 2.898 million tons despatched during January 2015 showing growth of 6.47%. Again this was mainly attributed to healthy domestic sales. The local despatches during Jan 16 were 2.699 Million Tons against 2.419 Million Tons during Jan., 15 showing growth of 11.54%. Export despatches during Jan., 16 dropped to 386,562 Tons against 478,000 Tons during Jan., 15 showing decline of 19.19%.Spokesman of All Pakistan Cement Manufacturers Association said that despite many reminders on significant issues which have been depleting export volumes, apparently no interest has been shown by the government to address them. ‘Government must take immediate steps to stop smuggling of Iranian cement into the country,’ he further added.
‘Government should also impose 20% Regulatory Duty for import of cement in addition to custom duty in order to protect local industry,’ said the APCMA spokesman.
The spokesman further mentioned that the government should also give due attention to reduce energy costs including removal of GIDC imposed on gas, reduction of custom duty on coal to 0% and additional incentive of 5% on export of cement by sea in order to reduce the overall cost of operations to make the Pakistani cement industry competitive globally.

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