Cement dispatches reached historic heights in March 2017, touching almost 4 million tonnes with capacity utilisation crossing 101 per cent on the strength of a robust domestic demand, though exports declined by 60 per cent compared with exports in March 2016.
The statistics released by All Pakistan Cement Manufacturers Association (APCMA) indicates that the ever increasing domestic market has vindicated the manufacturers thrust on adding new capacities. Pakistan needs sustaining infrastructure activities for at least a decade to close the infrastructure gap with competing economies.
The cement industry is playing its due role to get the momentum going and in March 2017, the industry dispatched 3.964 million tonnes of cement against 3.583 million tonnes dispatched during the corresponding month of last year.
The statistics reveal that the cement dispatches during the first nine months of this fiscal stood at 30.304 million tonnes, that is the highest ever dispatch recorded in the first nine months of a fiscal. The figure could have been much higher had the smuggling and under-invoicing of cement been curbed.
In the first nine months of this fiscal, the industry dispatched 30.304 million tonnes cement showing an overall growth of 6.90 per cent over the corresponding period of last fiscal. During this period the domestic consumption increased by 10.90 per cent but exports declined by 14.83 per cent. It is worth noting that the domestic cement consumption during July-March period of this fiscal increased by 10.26 per cent in the North and by 13.81 per cent in the Southern part of the country. In contrast, the exports from North declined by only 10.07 per cent compared with a decline of 13.81 per cent in the South. This should be a matter of concern for the authorities because in the past the South based mills being nearer to sea were leading cement exporters. The capacity utilisation during first nine months of current fiscal is 87.1 per cent.
According to a spokesperson of APCMA, the domestic producers are coping with the challenges of unethical exports on the strength of their excellent quality. Substandard cement created a distraction but could not suppress the demand for high-quality Pakistani cement. This cement is much preferred over Indian cement in Indian Punjab but unfortunately, our planners have not succeeded in pursuing the Indians to remove the tariff and nontariff barriers. High duties on cement are increasing the cost of the commodity and hurting the consumers. If duties are reduced, the manufacturers could pass on the benefit to the consumers and lower cement cost may give rise to construction activities, creating more jobs for the skilled and unskilled labour.
The domestic despatches in March 2017 were 23 per cent higher than the dispatches in March 2016. The exports, in contrast, declined by a whopping 60.39 per cent. This massive decline in exports reduced the dispatches growth during March 17 to only 10.63 per cent. In the first nine months of this fiscal, the domestic dispatches increased by 10.90 per cent while the exports registered a decline of 14.83 per cent.
Mills based in Northern parts of the country despatched 3.058 million tonnes cement during March 17 for domestic consumption, while those located in the South despatched 0.695 million tonnes of cement during the same period. He said during the same months the exports from North were only 0.141 million tonnes and from South 0.071 million tonnes.
The APCMA spokesman said that clinker and cement are being manufactured locally and is abundantly available in Pakistan. It is surprising to note that the list of locally manufactured goods as notified by the Federal Board of Revenue vide Custom General Order no. 11 of 2007 dated August 28, 2007, does not include cement. Secondly, the import of clinker and cement is liable to 10pc and 20pc of customs duty and due to cheap energy cost in neighbouring countries; low-grade quality cement is being dumped in the Pakistani market.
It is urged to increase the customs duty on import of clinker and cement from 10pc and 20pc to 35pc in order to support the local manufacturers and imports of cement should not be allowed until exporter have registered themselves with Pakistan Standards and Quality Control Authority (PSQCA) and PSQCA certified the quality of cement just as being done by India and all other importing countries authority.
