Cement despatches decline 23pc in April

LAHORE: Following the closure of both export and domestic markets owing to COVID-19 outbreak, Pakistan’s cement despatches declined by 23.65pc to 3.52 million tonnes in April 2020, as compared to 4.61 million tonnes in April 2019.

According to a statement issued by All Pakistan Cement Manufacturers Association (APCMA), the cement sector, which was already struggling to survive on extremely high input costs, was badly hit by the lockdown imposed by the government during the month, particularly in its first half.

A decline in domestic consumption was witnessed both in the north and south zones of the country, as it fell 18.97pc to 3.271 million tonnes in April 2020, from 4.037 million tonnes in April 2019.

Domestic despatches from southern mills fell by 49.85pc, from 0.683 million tonnes in April 2019 to only 0.342 million tonnes last month, whereas mills based in the north despatched only 2.928 million tonnes domestically in April 2020, down by 12.68pc from 3.353 million tonnes in the same month of last year.

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Meanwhile, cement export recorded its first monthly decline in this fiscal year, as it fell from 574,026 tonnes in April 2019 to a mere 249,127 tonnes last month, depicting a fall of 56.6pc.

Exports from the southern zone declined by 27.97pc, from 343,611 tonnes in April 2019 to only 247,519 tonnes in April 2020.

The situation was even more dismal for the mills situated in the north, as exports in April 2020 were negligible at 1,609 tonnes, falling 99.3pc from 230,415 tonnes in April last year.

On a cumulative basis, total despatches, however, inched up by 3.45pc to 40.55 million tonnes in the first ten months of this fiscal, as compared to 39.20 million tonnes during the same period last year, mainly on better performance during pre-pandemic months.

Domestic despatches from the north increased by 8.96pc to 28.941 million tonnes during July-April FY20 from 26.561 million tonnes in July-April FY19, whereas southern mills recorded a significant fall in local despatches (-29.11pc), from 6.936 million tonnes in 10MFY19 to 4.917 million tonnes this year.

Exports from south rose by 37.08pc from 3.486 million tonnes last year to 4.779 million tonnes this year, whereas the mills in north registered 13.63pc decline in exports, falling to 1.916 million tonnes from 2.219 million tonnes last year.

“The decline in construction activities around the world, including Pakistan, contributed to the downfall in demand. However, the cement sector was under acute distress even before COVID-19,” said the spokesman of APCMA.

The association noted that the federal excise duty and sales tax had increased 132pc during the last seven years, from Rs1,460 per tonne (Rs73 per bag) in 2012-2013 to Rs3,380 per tonne (Rs169 per bag).

It said the sector had paid a higher price of coal as imports were planned pre-pandemic, besides paying higher power rates, packing material rates and wages. Exorbitant interest rates also impacted the balance sheets of most cement units.

“The construction sector received numerous tax concessions from the federal government but it will prosper only if the industries related with it are also duly accommodated through tax concessions,” said APCMA spokesman. “The federal government should consider taking back additional taxes and duties that were imposed on the sector in the past two years so that industry could remain sustainable.”


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