Cement sales in the country have declined by 23.65% to 3.52 million tons in April 2020 as compared with 4.61 million tons in the same month last year, primarily because both the export and domestic markets crashed owing to the devastating impact of COVID-19, which halted construction activities around the world, including Pakistan.
According to a statement issued by All Pakistan Cement Manufacturers’ Association (APCMA), the cement sector that was already struggling to survive on extremely high input costs, and has been badly hit due to lockdown in the first half of the month.
The decline in domestic consumption was witnessed both in the North and South zones of the country as it fell 18.97% to 3.271 million tons in April 2020 from 4.037 million tons in the same month last year.
Domestic sales from mills in Southern region fell by 49.85% from 0.683 million tons in April 2019 to only 0.342 million tons last month whereas the mills based in North despatched only 2.928 million tons domestically in April 2020, down by 12.68% from 3.353 million tons in the same month last year.
Exports have recorded the first instance of decrease this year as they fell from 574,026 tons in April 2019 to a mere 249,127 tons last month, depicting a decrease of 56.6%, said the released statement. Exports from the Southern Zone declined by 27.97% to 247,519 tons in April 2020 as compared with 343,611 tons in April 2019.
The situation was worse for the mills situated in the North as the exports in April 2020 were negligible at 1609 tons, falling 99.3% from 230,415 tons in April last year.
The total sales inched up by 3.45% to 40.55 million tons in the first ten months of this fiscal as compared to 39.20 million tons during the same period last year, mainly on the strength of better performance in pre-pandemic months.
Domestic sales from North increased by 8.96% to 28.941 million tons during July 19-Apr 2020 from 26.561 million tons in July 18-Apr 2019 whereas the mills in South have recorded a significant fall in local sales, which were down by 29.11% from 6.936 million tons in first 10 months of the last fiscal to 4.917 million tons this fiscal.
Exports from South rose by 37.08 % from 3.486 million tons in the first ten months of last fiscal to 4.779 million tons this year whereas the mills in North registered 13.63 % decline in exports, falling to 1.916 million tons from 2.219 million tons last year.
The spokesman of APCMA while commenting on the fall in demand said:
The decline in construction activities around the world including Pakistan contributed to a downfall in demand, however, the cement sector even otherwise was operating under acute distress. The construction sector got numerous tax concessions in the construction package announced by the Federal Government but it will prosper only if the industries related to it are also duly accommodated through tax concessions. The Federal Government should consider taking back additional taxes and duties that were imposed on the sector in the past two years to enable the industry to remain sustainable.