Cement sector posts growth for second consecutive month

Cement exports jump 16.48pc to 2.804m tonnes during the first four months of FY20

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ISLAMABAD: The cement sector reported a 9.19pc increase in despatches in October 2019, as 4.984 million tonnes of cement despatched during the month as compared to 4.564 million tonnes in October 2018.

As per the data compiled by the All Pakistan Cement Manufacturers Association (APCMA), the cement despatches increased in September 2019 after negative growth in the first two months of the fiscal while the positive trend continued in October as well.

North zone registered an increase of 15.86pc in local despatches during October with 3.605 million tonnes of despatches as compared to 3.111 million tonnes in October last year. It is interesting to note that the local cement despatches from the northern part of the country alone were higher than the total cement despatches in any of the first two months of this fiscal.

The sour point, however, is that the domestic cement uptake in the southern region remained low in October 2019, despatching just 0.591 million tons, down by an alarming 29.41pc from 0.837 million tonnes in October 2018.

The exports continued with the growth trend, increasing by 27.95pc from 0.616 million tonnes in October 2018 to 0.788 million tonnes in October 2019. The growth in export was exclusively executed from the southern region, which rose by 48.75pc from 0.352 million tonnes in October 2018 to 0.591 million tonnes last month; exports from north grew nominally from 0.264 million tonnes in October last year to 0.265 million tonnes in October 2019.

In the first four months of this fiscal, cement manufacturers despatched 16.117 million tonnes of cement, 4.53pc higher than 15.419 million tonnes despatched during the same period last year.

The local despatches were recorded at 13.312 million tonnes in the said period, 2.3pc higher than 13.011 million tonnes of local despatches in the first four months of FY19.

The mills situated in the northern part of the country despatched 11.451 million tonnes to the domestic market, 11.14pc higher than the domestic despatches of 10.304 million tonnes in the northern region during the corresponding period of last year. The south zone despatched 1.861 million tonnes of cement for domestic market in the July-October 2019 period, 31.27pc less than 2.707 million tonnes despatched during the same period last year.

The exports increased by 16.48pc in the period of July-October 2019 to 2.804 million tonnes from 2.408 million tonnes during the same period last year.

The export from north during the first four months of this fiscal was 0.954 million tonnes, 5.64pc less than 1.011 million tonnes during the same period last year. However, in view of total loss of Indian market, the decline is not that sharp.

It is interesting to note that exports from the southern region almost matched the domestic consumption as the region exported 1.851 million tonnes of cement during July-Oct 2019 period. The growth in cement exports from the south was 32.5pc, as it grew from 1.397 million tonnes in the corresponding period last year.

“It is strange that for the first time two cement producing centres of the country are depicting opposite trends in domestic use of cement. Last fiscal, the domestic uptake was stronger in the south while this year northern zone is in big lead,” said the APCMA spokesman.

He said that this growth trend is a sigh of relief but subdued consumption in the south is still a major concern. “Commencement of work on the government housing projects already announced will have a positive impact on the uptake of cement in both the regions and other construction materials too, creating earning opportunities for both skilled and unskilled labour,” he added.

He also appealed the government to minimise duties and taxes on cement sector in order to increase cement consumption.

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