Cement sales, exports jump 37 percent in July

LAHORE: Cement sales and exports have bounced back sharply around 37 percent in July as normalcy is finding way back in the markets with demand recovering after four months of the coronavirus lockdown, industry’s data showed on Tuesday.

The new fiscal started with positive note for the cement sector as total dispatches registered an increase to 4.8 million tons in July from 3.5 million tons in the corresponding period a year earlier due to buoyancy in both exports and domestic market.

“The increase in cement dispatches last month gave the much-needed boost to the industry after a disappointing last fiscal year,” said a spokesman of the All Pakistan Cement Manufactures Association (APCMA).

The growth looks heartwarming when seen in context of only 1.98 percent growth in dispatches in 2019/20 that was totally supported by exports. Capacity utilisation in fact registered a decline of 0.94 percent in the last fiscal year. Increasing trend in fuel and energy prices increased the freight cost and overall cost of production, the spokesperson said.

“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.”

Local uptake of cement in July 2020 increased 32.6 percent to 3.9 million tons from 2.9 million tons in July 2019 while exports registered a more impressive increase of 66.1 percent to 0.88 million tons from 0.53 million tons in same month last year, according to the data released by APCMA.

The north zone led the total growth on the strength of its domestic market that grew by over 38.8 percent to 3.4 million tons compared with 2.4 million tons in last July. The trend in exports from the north zone was highly disappointing as the total exports from north-based mills stood at only 0.12 million tons, a decline of 46.9 percent when compared with exports of 0.23 million tons in last year.

The decline is due to trade standoff with India and slow construction activities in Afghanistan, according to the industry official. The performance of the south-based mills that are situated near sea ports was quite the opposite. The south based mills could only dispatch 0.518 million tons of cement in domestic market, a nominal increase of 2.39 percent over the dispatches of 0.506 million tons made in the same month last year.

The south-based mills, however, made up for slow growth in domestic market with a mind blowing growth of 153 percent in exports. Its exports of 0.76 million tons were 1.5 times the domestic sales of cement in southern part of the country. Last year, in July the cement exports from the south was only 0.301 million tons.