Capacity utilization of the cement industry of Pakistan touched 94.65 percent during the first five months of the financial year 2017-18 while the industry dispatched 2.261 million tons more cement in the first five months of this fiscal, which is 13.91 percent higher than the cement dispatched during the corresponding period of last fiscal.
Although, the increase recorded in domestic consumption in November 2017 was 9.89 percent, the overall growth of the sector stood at 5.16 percent; as it was negatively impacted by a steep decline in exports that went down by 27.11 percent.
In November 2017, the mills situated in northern part of the country dispatched 2.967 million tons cement locally, which is 10.2 percent higher than 2.692 million tons local dispatches in the same month last year. The local dispatches in the southern region rose by 8.4 percent from 0.578 million tons in November 2016 to 0.626 million tons in November 2017, said cement Industry sources.
However, exports from South based mills took a major hit as it went down by 45.4 percent from 0.129 million tons in November 2016 to 0.070 million tons in November 2017. Exports from Northern region also decreased by 8 percent to 0.278 million tons last month from 0.350 million tons in same month last year. The drop in exports continued in the first five months of this fiscal as the exports declined by 18.22 percent to 2.079 tons from 2.542 million tons during the corresponding period of this fiscal.
The cement industry is worried on the complacency shown by economic planners towards cement sector. The cement sector has so far withstood the impact of decline in exports due to a robust growth in the domestic market.
While all the previous issues raised by cement manufacturers in the last few months have remain unaddressed, increase in duties on coal has increased the cost of production, said the spokesman of All Pakistan cement manufacturers association. The increased consumption of cement does not mean that government imposes duties on its inputs instead of providing relief to the industry which is badly hit by decline in exports, he said adding that the Government should also honor its commitment made to the cement sector that excise duty will be withdrawn in a phased manner. “The government can generate revenue from stopping the smuggling of cement from Iran and under-invoicing as inaction against the culprits is not only disturbing the industry but eating up a major chunk of revenue,” he added.
