Cement Sales Increase 29.94% After 3 Months of Decline

After posting a decline for three consecutive months, cement sales increased by 29.94% in June 2020 to 4.623 million tons from 3.557 million tons in June 2019, ending the fiscal year 2019-20 on a positive note.

According to the data released by the All Pakistan Cement Manufacturers Association (APCMA), the domestic cement uptake increased by a massive 19.63% to 3.835 million tons in June 2020 from 3.206 million tons in June 2019.

The exports also increased by 123.89% from 0.351 million tons in June 2019 to 0.787 million tons in June 2020.

Domestic cement consumption in the north was 3.384 million tons in June 2020 compared to 2.750 million tons in June 2019, however, exports from north declined to 46,025 tons for June 2020 compared with 0.145 million tons in June 2019.

In the south, the scenario was the opposite where domestic consumption declined to 0.451 million tons from 0.455 million tons in June 2019, but exports increased from 0.206 million tons in June 2019 to 0.742 million tons in June 2020.

Overall cement consumption during FY 2019-20 inched up by 1.98 percent to 47.81 million tons solely due to higher export growth of 19.8% that crossed 7 million tons after a long time. The domestic consumption, however, contracted by almost one percent, the first such decline in six years.

The performance of cement units in different zones depicted the strength of the south zone in exports and the north zone in local consumption. In FY 2019-20, the mills in the north zone dispatched 34.327 million of cement to the local market that grew by 6.07 percent compared to the previous fiscal year.

However, it lost 22 percent of the export market by exporting only 1.97 million tons of cement. The region lost the Indian market due to the protective policies of the Indian government and the Afghan market due to a decline in construction activities in the landlocked country.

In the south zone, the mills were badly hit by low consumption in the region, as their dispatches declined by 29.37 percent to only 5.637 million tons. However, its exports registered a healthy increase of 46.47 percent, as it exported 5.877 million tons of cement in 2019-20. In fact, the cement exports were higher than the local consumption perhaps for the first time in history.

“The higher uptake in June has provided a hope that the new fiscal year will be better as a result of the incentives provided to the construction sector,” said a spokesman of APCMA.

He appreciated the reduction in excise duty on cement but asked for its complete withdrawal.

He called the excise duty a punitive measure imposed to curb the use of harmful items. Cement, he reminded, was the backbone of the construction industry that the government should promote.

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