Cement industry continues to perform healthy

Cement industry continued to show healthy performance during August 2016 as it despatches stood at 3.585 million tons, 16.75 per cent higher, than the despatches of 3.071 million tons recorded during the same month of the last financial year.

According to the data released by the All Pakistan Cement Manufacturers Association (APCMA) domestic sales during August 2016 were 3.028 million tons against 2.5 million tons in August 2015 showing a robust growth of 20.92 percent.

Zone wise, domestic despatches during August 2016 in North were 2.495 Million Tons (August 2015: 2.034 million tons) and in South were 0.532 million tons (August 2015: 0.47 million tons).

On year over year basis, total domestic despatches during the first two months of current fiscal were 4.89 million tons compared to 4.3 million tons during same period of last fiscal, showing an impressive growth of 13.83%.

Overall Export dispatches have been continuously decreasing and during the first two months of current fiscal it went down from 1.032 million tons to 1.022 million tons during same period of last fiscal year.

Exports to Afghanistan dropped to 346,928 Tons during the first two months of current fiscal compared to 394,500 tons during same period of last fiscal showing a decline of 12.1%. Exports by sea suffered even more as against the quantity of 537,120 tons exported during July and August 2015, the exports during July and August 2016 were 407,120 Tons i.e. a reduction of 24.19%. However increased exports to India adjusted these shortfalls to some extent. The quantity exported to India during the first two months of current fiscal was 268,230 tons compared to 100,437 tons during same period of last fiscal.

APCMA circles claimed that the industry has come a long way in the past two decades increasing its installed capacity by five times during this period doubling its production capacity every 7-8 years. The buoyancy in the sector, on the strength of robust domestic consumption during last 20 months, has encouraged the players to go for further expansion in capacities.

The sector has grown at the rate of 10.97 percent in the first two months of this fiscal. It posted growth even in July despite Eid holidays that lasted for a week. Growth of domestic consumption in August is also robust as the consistent rains failed to affect the construction activities. The already launched infrastructure projects also gave boost to cement uptake. The upcoming projects along CPEC route would further boost consumption. Due to this, various companies are going for expansion which will increase the overall capacity and will help in the development of CPEC Projects.

Domestic consumption of cement has increased significantly while the industry is yet to realize its exports potential, mainly due to the lack of support from government. It is pertinent to mention that loss of Afghanistan market is a matter of concern for the industry which has been marginalized in Afghan market by subsidized Iranian exports.

According to the Industry’s data analysis, cement manufacturing has reached its new highs and with some incentives from government the industry can further explore Indian, Afghan and other neighbouring markets, earning valuable foreign exchange for the country.