Engineering Post Report
Pakistan’s cement industry has continued to grow on the back of well in time federal government initiatives irrespective of the apprehensions caused by pandemic of Covid-19.
Construction activities by the private sector accompanied by work at Bhasha and Dasu dams helped in increasing local cement consumption.
The federal government had introduced an incentive package for the construction industry in April 2020 which stimulated the industry especially the private sector housing projects. The Incentive Package so announced included amnesty scheme ,tax exemption and Rs 36 billion subsidy for Naya Pakistan Housing Scheme. Further, the banks were also directed to increase construction sector loans to 5 per cent of their total loan book and Federal Excise Duty (FED) reduction on cement from Rs 2/kg to Rs 1.5 /kg have also given impetus to this industry.
A significant increase in Foreign Direct Investment (FDI) and Long Term Financing Facility (LTFF) for construction sector also bode well for the industry. Net FDI in construction sector had increased by 84.5 per cent during July-April 2021 and reached the level at US $ 22.7 million. Also during July-April 2021, construction sector had availed Rs 3519 million loan against Rs 20 million retirement during the same period last year.
Cement industry had posted the highest ever Year-on-Year ((Y-o-Y) growth of 44.6 per cent in July-March FY2021 due to massive increase in domestic consumption as well as exports . Total cement dispatches stood at 5.381 metric ton t as against 3.719 metric ton t the previous year. Domestic consumption had also grown by 42 per cent to 4.563 metric ton as compared to 3.213 metric ton in July-March FY 2020.
The export trend represented a substantial growth of 61.5 per cent to 0.818 metric ton dispatches in March FY 2021 as compared to 0.506 metric ton during the previous year.
Domestic consumption of cement in the northern region had grown by 38.6 per cent in March FY2021 registering 3.809 metric ton dispatches as compared to 2.749 metric ton dispatches in the same month last year. Exports from north-based mills registered an enormous increase of 162.6 per cent as the volumes increased from 0.106 metric ton in March FY2020 to 0.280 metric ton in March FY2021.
Domestic consumption in the southern region had also increased by 62.3 per cent and reached to 0.753 metric ton in March 2021 as compared to 0.464 metric ton in March FY2020 while exports from the region increased by 32.5 per cent from 0.400 metric ton in March FY2020 to 0.530 metric ton in March FY2021.
Total local dispatches during July2020-March 2021 had increased by 18.3 percent to 36.2 metric ton from 30.6 metric ton last year. Exports had risen to 7.1 metric ton (10.9 per cent increase) from 6.4 metric ton during the same period last year. According to the All Pakistan Cement Manufacturers Association (APCMA), local dispatches from the northern region had increased by 17.7 per cent southern region dispatches had surged by 21.3 per cent during July-March FY2021. During the same period, exports from the northern region edged by 0.2 per cent while southern region came up with 15.5 per cent growth during the period under report here.
Cumulative dispatches, local as well as exports, on the whole had posted a growth of 17 per cent and reached to 43.325 metric ton during July-March FY2021 as compared to 37.035 metric ton in the corresponding period previously.
