The cement sector has reported its highest-ever sales in September 2020. The total sales during September 2020 stood at 5.213 million tons versus 4.273 million tons in September 2019.
According to data released by the All Pakistan Cement Manufacturers Association (APCMA). the local uptake of cement in September 2020 increased by 17.65 percent to 4.089 million tons from 3.475 million tons in September 2019 while exports registered an increase of 40.95 percent, increasing to 1.124 million tons from 0.797 million tons in the same month last year.
In the north region, domestic cement dispatches increased by 16.30 percent to 3.523 million tons during September 2020 from 3.029 million tons in September 2019. Exports from the north increased by 9.27 percent to 0.287 million tons in September 2020 from 0.263 million tons in September 2019.
There has been a positive growth in the southern region as well where the domestic cement dispatches increased by 26.84 percent to 565,236 tons from 445,629 tons in September 2019. Exports from the South continued to grow and increased by 56.53 percent to 837,033 tons in September this year from 534,751 tons in September 2019.
Suban Iqbal, a financial analyst told ProPakistani,
In September, the cement industry utilization was at 82%. The overall growth in local demand is mainly by the private sector after the announcement of the construction package along with construction work on different dams while export growth is mainly due to the resumption of economic activity in Sri Lanka, China, and other African markets where Pakistan export clinker. In the later part of FY20, The uptake of cement is expected to grow double digits due to more liquidity in this sector after the introduction of the Roshan digital account facility, SBP directions to banks to take construction sector loans to 5% of the total loan book, the Amnesty scheme through the construction package, expected lower interest rates in FY21. While exports are also expected to grow as well along with local sales due to the expected sharp recovery from Afghanistan’s market after successful peace talks between Afghanistan’s government and the Taliban
Total cement dispatches during the quarter increased by 21.88 percent to 13.573 million tons from 11.136 million tons in July-Sep 2019. Domestic despatches registered a healthy increase of 18.84 percent, increasing from 9.120 million tons to 10.837 million tons. Exports also showed encouraging growth increasing by 35.67 percent from 2.016 million tons to 2.735 million tons.
The cement industry in Pakistan made large investment in new plant and machinery and modernization over the last few years, which has helped the consumer the availability of cement at very competitive rates compared to other countries in the region.
Cement is a basic commodity required to play an important role in the development of the country, is subject to very high taxes including Federal Excise Duty of Rs. 1,500/- per ton equivalent to Rs. 75/- per bag. Government must abolish Federal Excise Duty as this is not a luxury product.
The recent construction package announced by the Prime Minister of Pakistan has helped the industry grow and is fully aligned to support the government in its efforts to restart the development and reindustrialization.
The cement industry faced huge losses during the financial year 2019~2020 with the recent raid by Competition Commission of Pakistan adding insult to injury.