KARACHI: Cement exports in the month of February 2018 have gone up by 18.41 per cent as compared to same month last year, which gives a glimmer of hope to the industry that has been suffering due to declining exports for years.
In February, though the local cement consumption continued to grow robustly and stood at 9.38 per cent, the percentage of increase in exports was even higher than domestic consumption for the first time in current fiscal.
Cement sector is experiencing dream growth particularly in the domestic market for the last three years. According to data released by All Pakistan Cement Manufacturers Association (APCMA), this fiscal year the cement despatches have crossed 3 million tonnes in the eight months period (July-Feb). In two of these months, cement despatches crossed 4 million tonnes. The total cement despatches in the first eight months of this fiscal stood at 30.106 million tonnes compared with despatches of 26.339 million tonnes during the corresponding period of last year. This is an increase of almost 4 million tonnes in eight months. Overall the sector grew by 14.30 per cent during this period.
In the month of February, the total cement despatches were 3.781 million tonnes. Out of this, despatches in the North were 3.052 million tonnes while cement despatches in Southern part amounted to 0.729 million tonnes. The exports from North based mills amounted to 0.181 million tonnes and from South based mills was 0.120 million tonnes.
The increase in exports was 18.41 per cent compared with an increase of 9.38 per cent recorded in domestic consumption. The capacity utilisation in the first eight months of this fiscal was 91.34 per cent of the total installed capacity of the cement sector.
The spokesman of APCMA said that the cement industry is among the highest contributors to the national exchequer over the last few years. The contribution has increased to Rs117 billion in 2016-17 from Rs39 billion in 2012-13. During the year 2016-17, per tonne impact of duties and taxes was Rs3,082, Rs154 per bag. This incidence of high taxation negatively affects domestic consumption. Presently, FED on cement is Rs1,250 per tonne i.e. Rs62.5 per bag.
APCMA spokesperson further added that the government should keep its promise and gradually reduce FED to “Zero” to encourage cement offtake as this would support housing and infrastructural development of the country and create more employment.
The spokesman of APCMA, attributing the domestic growth in the sector to the policies of the government and its thrust on mega infrastructure projects, said that the local production could increase substantially if the smuggling of this commodity from Iranian border is checked. Moreover, he appealed to the government to eliminate the mafia that is bringing in Iranian cement at engineered low rates to save government levies including sales tax. “Iranian cement would not be able to stand against Pakistani cement in quality and price if the import rules are strictly followed. Customs duty on import of both clinker and cement should increase to a uniform rate of 35 per cent in order to support the local cement industry. Moreover, import of cement should not be allowed until Pakistan Standards and Quality Control Authority certifies the quality of cement being imported into the country,” he added.
