KARACHI: The cement industry ended fiscal 2017-18 on a jubilant note, posting yearly growth of 13.84 per cent, with domestic consumption increasing by 15.42 per cent and exports inching up by 1.77 per cent – for the first time in nine years that exports registered growth.
According to data released by All Pakistan Cement Manufacturers’ Association (APCMA), during the fiscal year 2017-2018, domestic consumption stood at 41.147 million tonnes, an increase of 15.42 per cent from 35.651 million tonnes in 2016-17.
However, exports grew by only 1.77 per cent from 4.664 million tonnes in 2016-17 to 4.746 million tonnes during 2017-18.
In the month of June, the total cement dispatches were 2.979 million tonnes. Out of this, local dispatches in the North were 2.158 million tonnes against 1.897 million tonnes in June 2017 reflecting a growth of 13.77 per cent. Cement dispatches in Southern half amounted to 0.423 million tonnes against 0.485 million tonnes in June 2017, reflecting a negative growth of 12.79 per cent. The exports from North based mills amounted to 0.183 million tonnes against 0.223 million tonnes in June 2017 and from South based mills was 0.215 million tonnes against 0.122 million tonnes in June 2017.
The industry dispatched 45.893 million tonnes of cement in 2017-18 against 40.315 million tonnes dispatched in 2016-17. This is the highest ever growth posted by the industry in its history. In fact, the past five years have been positive for the cement industry of Pakistan as annual dispatches increased by 12.46 million tonnes from 33.43 million tonnes in 2012-13 to 45.89 million tonnes in 2017-18. The year 2017-18 has witnessed particularly buoyant times as dispatches grew by 5.5 million tonnes.
If viewed month wise, dispatches in June 2018 were the lowest in 12 months. This was the only month in which total dispatches were just below three million tonnes. However, at 2.9 million tonnes, this was still 9.25 per cent higher than June 2017.
During the remaining eleven months, dispatches breached the 4 million tonnes level three times and remained much above 3 million tonnes in the remaining eight months.
It is worth noting that cement exports have been declining since 2008-09. Even in the first seven months of 2017-18 the exports declined steeply. The turnaround started in February this year with a growth of 18.41 per cent followed by massive jumps of 84.90 and 81.39 per cent in March and April and then by 41.88 per cent in May and 15.33 per cent in June 2018. It was because of this massive growth in last five months of last fiscal that the negative trend of first seven months turned into a positive export growth of 1.77 per cent. Pakistan exported 4.7 million tonnes cement in fiscal year 2017-18.
The industry increased its production capacity by 6.58 per cent during 2017-18 and its capacity utilization stood at 92.82 per cent, highest since 1992-93 when its total production capacity was only 8.89 million tonnes compared with 49.44 million tonnes in 2017-18.
APCMA spokesman said that reinvigorated increase in exports is a welcome sign for the industry and the decline in rupee value against dollar is finally restoring lost competitiveness of cement sector in the global markets.
However, APCMA said that rising input cost, especially coal and fuel prices is hurting the local industry.
“We urge the government to provide relief to the cement sector by reducing duties and taxes providing further boom in local consumption while also making the commodity more competitive on the global front, boosting export potential,” he added.
