Cement Consumption Reaches Record High Despite Decreasing Exports

Cement consumption continued to surge in October 2017 as the monthly dispatch of the commodity reached a record high of 4.222 million tons, which is 19.71 percent higher than 3.526 million tons dispatched in October 2016.

The total dispatch of cement in the country has reached 14.570 million tons in the first four months of 2017-18, which is 16.53 percent higher than 12.503 million tons dispatched during the corresponding four months of last fiscal year. The increase in cement shipment is despite the fact that the exports during the period under review declined by 16.16 percent.

Much of the surge in cement supply in October 2017 was due to the high local demand, as domestic consumption increased by 25.61 percent from 3.008 million tons in October 2016 to 3.779 million tons last month. However, the exports continued to decline which went down 14.55 percent in October 2017 as compared to same month last year, from 0.518 million tons to 0.443 million tons.

“Higher cement consumption in the country is a sign of its growing economy that is having positive impact on over three dozen industries connected with construction sector,” said a spokesman of All Pakistan Cement Manufacturers Association.

The spokesman said that the exports still remain below par. “APCMA has pointed out the reasons for decline in exports that are worrisome, as the industry still has idle capacity,” he said adding that almost all decline in exports is via sea. Exports to India are also affected but not to that extent.

He said the cement demand in the North Zone remained surprisingly high as the consumption in the region stood at 3.148 million tons during October 2017. He said it was for the first time that North Zone has consumed more than three million tons of cement in a month.

In October 2016 the domestic cement consumption in the North Zone was 2.489 million tons. He said cement demand in the Southern region of the country also increased from 0.519 million tons in October 2016 to 0.631 million tons in October 2017.

He said that due to robust growth in local consumption in the first four months of the current financial year, the industry utilized over 93 percent of its installed capacity. “This is the highest capacity utilization by the industry in last 20 years. However, 1.08 million tons capacity still remained idle,” he said adding that this could have been covered by exports if the government policies were export friendly.

He said that higher cement consumption does not mean that the economic planners ignore the genuine difficulties faced by this sector. He said 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 challenges 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 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 demand. Similarly, import duty on coal imported by the sector should be brought at par with other sectors.

  • Headline: “Cement Consumption Reaches Record High DESPITE Decreasing Exports”. How is local cement demand related to cement exports? Please enlighten me on this ingenious economic statement.

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