The cement sector ended the current fiscal with a bang, posting a cumulative growth of 45 percent in the month of July compared to the corresponding month last year; with domestic consumption increasing by a whopping 55 percent and exports by 2.28 percent.
The turnaround, after a dismal performance in June 2017, took the industry by surprise and the sharp increase in dispatches in July 2017 revived hopes for the sector. The dispatches were achieved despite political turmoil and unprecedented rains throughout the country which depicts the maturity of the construction sector of the country.
Capacity utilization was high at 86.46 percent. It is pertinent to mention that the annual cement dispatch capacity of the industry has increased to 46.94 million tons.
Local dispatches from units based in the Northern region of the country were 2.423 million tons while their export dispatches were 0.338 million tons in July 2017 as opposed to 1.516 million tons local and 0.306 million tons export dispatches in July 2016.
South based mills also recorded a growth in local dispatches which increased from 0.352 million tons in July 2016 to 0.483 million tons in July 2017 whereas, exports took a hit going down to 0.138 million tons from 0.159 million tons in July 2016.
Exports to Afghanistan increased by 40.25% from 0.15 million tons in July last year to 0.21 million tons in July 2017. However, this major increase was offset by a decline of 11.61% and 18.95% to exports in India and other countries by the sea which stood at 0.122 and 0.144 million tons respectively in July 2017, down from 0.138 million tons and 0.178 million tons in July last year.
A spokesman for All Pakistan Cement Manufacturers’ Association said that the dispatch figures for July are most encouraging. He said that by dispatching 3.382 million tons of cement in July 2017, the industry has established a record for this month. Never before, he added, the sector had crossed the dispatch limit of 3 million tons in the month of July.
However, he said, that this does not mean economic planners ignore the genuine difficulties faced by this sector. He added that the industry is performing in stiff regulatory environment and is only surviving because it has upgraded its technology that has provided it the strength to take any challenge head on.
‘Our quality is the best in the region and our efficiency is second to none. No cement could compete with Pakistani cement if imported at the real and fair value after paying all government levies. However, weak border controls and lax customs vigilance allow entry of cement from across our borders at unfair valuations hurting the local cement industry,’ he added.
The spokesman said that the government should lower excise duty on the sector to further boost dispatches. In the same way, the import duty on coal imported by the sector should be brought at par with other sectors.