- Total despatches in the first nine months of FY19 stood at 29.448m tonnes as compared to 31.314m tonnes in the same period of FY18
ISLAMABAD: The cement sector, sitting on huge unutilized capacities, continued to suffer from lack of domestic demand owing slower growth, lower development expenditure and delay in the launch of the low-cost housing scheme.
Cement consumption is usually high in the month of March as construction activities peak due to pleasant weather conditions and urgency in completing the government’s development works within the financial year. However, total despatches in March 2019 declined by 6.7pc to 4.340 million tonnes from 4.652 million tonnes in March 2018.
The trend of decline in domestic consumption continued, as it went down to 3.858 million tonnes in March 2019 from 4.260 million tonnes in March 2018, depicting a decrease of 9.44pc.
Although exports continued to increase, the growth posted in March 2019 (23.08pc) is the lowest export growth in the last six months.
The domestic consumption in the northern part of the country continued to decline, as it was only 3.071 million tonnes last month, as against 3.543 million tonnes during the same month last year. Exports from the mills based in the northern region also declined to 0.131 million tonnes in March 2019 as compared to 0.218 million tonnes in March 2018.
Domestic despatches from mills in the southern part of the country stood at 0.787 million tonnes in March 2019 as compared to 0.717 million tonnes in March 2018. Exports from the region increased from 0.173 million tonnes in March 2018 to 0.350 million tonnes in March 2019.
The decline in March was in line with the trend in the current fiscal, as total local despatches in the first nine months of this fiscal stood at 29.448 million tonnes as compared to 31.314 million tonnes in same period last year (-6pc), whereas export rose to 5.132 million tonnes in July 2018-March 2019 as compared to 3.444 million tonnes same period last year.
The most worrying aspect for the cement industry is the continued slump in the northern region of the country where local despatches declined by over 10pc in the last nine months, from 25.887 million tonnes in 2017-18 to 23.199 million tonnes.
On the other hand, local despatches from the mills situated in southern region of the country have increased in first nine months of the fiscal by 15.16pc to 6.248 million tonnes from 5.426 million tonnes in July 2017-Mar 2018.
Exports have also increased from the south-based mills by 210pc in the last nine months, from 1.013 million tonnes in July 2017-March 2018 to 3.143 million tonnes in the last nine months. Exports in the north stood at 1.988 million tonnes in the first nine months of this fiscal as compared to 2.431 million tonnes during the same period last year, a decline of 18.19pc.
“The cement industry has been under pressure this fiscal as development expenditure has been slashed by 40pc from last year. We also pinned our hopes on the announcement of the government’s programme to build five million low-cost houses in the next five years but that project is still to see the light of day,” said the spokesman of All Pakistan Cement Manufacturers’ Association (APCMA). “The government should start the project as soon as possible as this is the only chance to gear up production in the industry.”
He said the industry would face shortage of transport both for domestic and export despatches due to the law on axle load restriction. He appealed the government to relax the axle load limitations and give a viable deadline to the transporters to add more fleet.