Capacity utilisation in cement sector touches 95pc

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ISLAMABAD: Cement sector has witnessed a sales boom for the last four years, more so this fiscal year as total despatches reached 22.243 million tonnes in July-December 2017 against 19.806 million tonnes during the corresponding period of last fiscal.

According to data released by All Pakistan Cement Manufacturers’ Association (APCMA), in first six months of this fiscal year, the domestic consumption stood at 19.836 million tonnes, an increase of 17.41 per cent from 16.895 million tonnes in July-Dec 2016. However, the continued decline in exports affected overall growth as exports dropped by 17.34 per cent from 2.911 million tonnes in July-Dec 2016 to 2.406 million tonnes during the same period this year.

The cement units located in Punjab and Khyber Pakhtunkhwa despatched 16.455 million tonnes cement locally in July-December 2017, which is 18.12 per cent higher than 13.930 million tonnes local despatched in the same period last year. The cement units located in Sindh and Balochistan despatched 3.382 million tonnes cement locally in July-December 2017, which is 14.06 per cent higher than 2.965 million tonnes local despatches in the same period last year.

However, what is alarming is that exports from South based mills took a major hit as same went down by 36.23 per cent from 0.953 million tonnes in July-December 2016 to 0.608 million tonnes in July-December 2017. Exports from the Northern region have also decreased by 8.14 per cent to 1.799 million tonnes during July-Dec 2017 from 1.958 million tonnes in the same period last year.

Exports are down not only because of the high cost of doing business but also due to the lax attitude of the regulators who are ignoring malpractices in imports and plea of the cement manufacturers to cut down duties and taxes on exports helping the local industry to compete globally.

“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 APCMA spokesperson.

The government ignored the timely warnings given by the 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 even checks the quality of imports as is done on our exports going to India, Sri Lanka and African countries.

In December 2017 the industry despatched 3.730 million tonnes cement which was 4.94 per cent higher than the despatches of 3.555 million tonnes in the corresponding month of last year.

In December 2017, exports decreased by 11.25 per cent to 0.328 million tonnes as compared to 0.369 million tonnes in December last year, whereas local despatches increased by 6.82 per cent from 3.185 million tonnes in December 2016 to 3.403 million tonnes in December 2017.