‘Cement industry to operate at only 78pc capacity’

Dec 2019 sees cement despatches grow by more than 10pc 

ISLAMABAD: The All Pakistan Cement Manufacturers Association (APCMA) has warned the government of increased unemployment in the industry if measures to boost the construction sector were not taken immediately.

“The industry is sitting on a huge unutilised capacity as it is expected to despatch just over 47 million tonnes cement this year (FY20) as against the installed capacity of 59.65 million tonnes,” the APCMA spokesman said on Thursday. “This situation will not trigger any investment or expansion in the industry, and will eventually lead to an increase in unemployment.”

To support the sector, he suggested the government to start work on the Public Sector Development Programme (PSDP) and announce housing projects that could provide a much-needed impetus to the construction sector.

According to the latest data released by APCMA, the cement sector despatches continued with their six-month pattern, as the northern region excelled in domestic despatches but performed poorly in exports, whereas the southern region excelled in exports but its performance in the domestic market remained relatively slow.

Industry experts believe that the wide difference in local consumption in the north and south depicts “a lopsided growth pattern of the economy”.

In the month of December 2019, cement despatches increased by 10.69pc to 4.3 million tonnes, compared to 3.9 million tonnes in the same month of 2018. Domestic consumption increased by 7pc, from 3.3 million tonnes in December 2018 to 3.5 million tonnes in December 2019, while exports registered a significant increase of 30pc, from 0.6 million tonnes to 0.77 million tonnes.

During the month under review, the northern mills despatched 3.17 million tonnes of cement, 11.2pc higher than 2.85 million tonnes they dispatched in December 2018. Domestic despatches increased from 2.62 million tonnes in December 2018 to 2.96 million last month whereas exports decreased from 0.227 million tonnes to 0.207 million tonnes.

Southern-based cement mills despatched 1.135 million tonnes in December 2019, up 9.24pc from 1.039 million tonnes despatched in December 2018. The domestic consumption declined from 0.675 million tonnes in December 2018 to 0.572 million tonnes in December 2019, however, exports from the region increased from 0.364 million tonnes to 0.563 million tonnes.

In the first six months of this fiscal, cement despatches in the country increased 6.51pc to 24.751 million tonnes as against 23.239 million tonnes dispatched during the same period last year. Domestic consumption registered an increase of 3.54pc, from 19.677 million tonnes to 20.373 million tonnes, while exports increased by over 22pc, from 3.561 million tonnes to 4.377 million tonnes.

The northern mills despatched 17.406 million tonnes of cement to the local market in the first six months of this fiscal, registering an increase of 11.65pc compared to the same period last year. Exports from the northern region could only reach 1.420 million tonnes, registering a decrease of 3.85pc.

The southern region despatched 2.967 million tonnes of cement for the local market in the first six months of this fiscal, 27.41pc lower than the despatches during July-December 2018. It is interesting to note that the exports from the South in the last six months almost matched the local consumption in that region. The exports stood at 2.957 million tonnes, an impressive growth of 41.87pc.

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Ghulam Abbas
The writer is a member of the staff at the Islamabad Bureau. He can be reached at [email protected]
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