Cement despatches up 15.6pc in H1FY21

Total despatches during July-Dec period clocked in at 28.6m tonnes as compared to 24.7m tonnes in 1HFY20

LAHORE: Cement despatches during the first six months of the current fiscal year (H1FY21) increased by 15.66 per cent to 28.628 million tonnes as compared to 24.751m tonnes during the same period last year, according to data released by the All Pakistan Cement Manufacturers Association (APCMA).

As per details, local cement despatches in the northern region grew 16.21pc to 20.228m tonnes during the July-December period as compared to 17.406m tonnes in the corresponding period of last year. Exports from the region, however, fell 15pc to 1.210m tonnes in the first six months of the current fiscal year from 1.420m tonnes during the same period last fiscal year.

In the southern region, domestic cement despatches grew 14pc to 3.381m tonnes in July-Dec FY21 from 2.966m tonnes in the same period last fiscal. Exports also swelled by 29pc to 3.806m tonnes from 2.957m tonnes in 6MFY20.

The APCMA spokesman attributed the decrease in exports from southern region during the last two months to heavy congestion at ports; as per the government’s directives, berthing priority is given to wheat, sugar and canola import vessels. “This is causing a great loss of exports of cement and clinker from the country as customers are diverting their ships to other destinations in the region to load cement and clinker due to heavy congestion at both ports in Karachi.”

He said the cement industry needs a level-playing field and requested the government that exports be prioritised so that industry can earn maximum foreign exchange the country.

Meanwhile, as per APCMA’s monthly data, local cement despatches increased to 4.154m tonnes in December 2020, as compared to 3.536m tonnes in December 2019, depicting a jump of 17.47pc. But exports during the month dropped to 633,431 tonnes compared to 769,986 tonnes in December 2019.

In the northern region, domestic cement despatches stood 17.09pc higher at 3.471m tonnes in December 2020 from 2.964m tonnes in December 2019. Exports from the region, on the other hand, plunged 40.52pc to 0.123m tonnes from 0.206m tonnes in December 2019.

In the southern region, domestic cement despatches rose 19.47pc to 682,854 tonnes in December 2020 from 571,558 tonnes in December 2019. Exports from the southern region came down by 9.36pc to 0.510m tonnes in December from 0.563m tonnes in December 2019.

The APCMA spokesman said that the rising trend of coal, electricity and diesel prices are also hurting the cement sector. During the last six months, coal prices have increased by almost $35 per tonne.

“On the other hand, duty and taxes on the cement sector are also very high; cement is subject to Federal Excise Duty at Rs1,500 per tonne (Rs75 per bag) and 17pc general sales tax (Rs77 per bag). Total direct taxes on cement are Rs152 per bag.”

He urged the government to give tax concessions on the cement sector which would reduce the cost of production, giving a boost to construction activities and employment in the sector.

The Federal Board of Revenue (FBR) is now in the process of implementing a Track and Trace System on major sectors such as tobacco, cement, sugar and fertiliser.

APCMA has already requested the government to implement the system on the cement sector, which would help promote a level playing field and boost revenues by curbing tax evasions.

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Hassan Naqvi
Hassan Naqvi
The writer is a staff reporter and can be reached at [email protected]


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