APCMA voices concern over fall in cement demand

Lahore: The All Pakistan Cement Manufacturers Association has requested the government to reduce excise duty and import duty on coal and check import of under invoiced cement from Iran, as decline in domestic demand of cement was beyond the usual reduction in construction activities that fell in June.

The Association regretted that instead of reducing duties the government has slapped additional tax on cement in the 2017-18 budget. The spokesman of the APCMA said this would further reduce domestic consumption and the revenue that the government expects from the new tax would in fact decline because of lower consumption. He said the huge decline in domestic demand in June was shocking for the industry that fears further erosion of demand as a result of new taxation.

According to figures, during the year 2016-2017 domestic cement dispatches by north zone mills were 29.141 million tons and export dispatches were 3.150 million tons, depicting a growth of 7.72 percent and negative growth of 18.22 percent respectively. Domestic cement dispatches by south zone mills were 6.511 million tons and export despatches were 1.514 million tons, depicting a growth of 9.47 percent and negative growth of 25.10 percent respectively. The overall growth in cement dispatches during the year 2016-2017 was a mere of 3.71 percent. The capacity utilization for the year 2016-2017 was 86.90 percent. The industry dispatched 2.727 million tons of cement in June 2017 against dispatches of 3.351 million tons in June 2016. For the first time in 11 months cement dispatches declined below 3 million tons. The steep decline in domestic demand eroded the excellent growth that the cement sector registered in past 11 months.

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