The new fiscal year has started with a positive note for the cement sector as its sales increased by 37.75% from 3.512 million tons in July 2019 to 4.838 million tons in July 2020 due to buoyancy in exports and the domestic market.
This growth comes after only a 1.98% increase was seen in sales during 2019-20, which was supported by exports. Domestic cement utilization, in fact, registered a decline of 0.94% in the last fiscal.
According to data released by the All Pakistan Cement Manufacturer Association (APCMA), the local uptake of cement in July 2020 increased by 32.67% to 3.953 million tons from 2.979 million tons in July 2019 while exports registered a more impressive increase of 66.14%, increasing to 0.885 million tons from 0.533 million tons in the same month last year.
The north zone, as usual, led the total growth on the strength of its domestic market that grew by over 38.86% to 3.435 million tons compared with 2.474 million tons cement sales in last year July. The trend in exports from the north zone was highly disappointing as the total exports from northern mills amounted to only 0.123 million tons, a decline of 46.93% when compared with exports of 0.231 million tons last year.
The decline is due to trade standoff with India and slow construction activities in Afghanistan.
The performance of the southern mills that are situated near seaports is quite the opposite. These mills could only despatch 0.518 million tons of cement in the domestic market, a nominal increase of 2.39% over the despatches of 0.506 million tons made in the same month last year.
The southern mills however made up for slow growth in the domestic market with a huge growth of 152.97% in exports. Its exports of 0.762 million tons were 1.5 times the domestic sales of cement in the southern part of the country. Last year in July, the cement exports from the south were only 0.301 million tons.
The APCMA spokesman commenting on the situation said the increase in cement sales last month gave the much-needed boost to the industry after a disappointing fiscal. He said that increasing fuel and energy prices has badly impacted the freight cost and overall cost of production.
The government must focus on public sector development projects and announce housing schemes to boost construction activities so that the employment and investment in the cement and allied industries can be safeguarded.