Cement sales increase 9.8%, though exports slow down
Industry sold 38.87m tons compared to 35.34m tons in previous year
The only sour point for the industry was the additional tax imposed in the budget for 2016-17 that led to an increase of Rs35 per bag in the cement price. PHOTO: FILE
LAHORE:
Cement sales in the just-ended financial year 2015-16 recorded a growth of 9.82% as volumes stood at 38.87 million tons compared to 35.34 million tons in the previous year.
According to data released by the All Pakistan Cement Manufacturers Association, the industry sold 33 million tons in domestic markets in 2015-16, a robust growth of 17.01% compared to sales totalling 28.2 million tons in the previous year.
Cement sales continue to shine
Exports, however, fell 18.38% to 5.87 million tons in FY16 compared to export of 7.2 million tons in the previous year.
The weakening exports were the result of 15.1% decline in shipments to Afghanistan and 32.68% drop in shipments to other countries via sea during the year. Exports to India, however, rose 42.53% to 992,631 tons.
An unstable security situation in Afghanistan and influx of Iranian cement restricted exports to Kabul to 2.44 million tons compared to 2.87 million tons in the previous year, say industry players.
Likewise, increased competition at the global level coupled with economic slowdown in countries to which Pakistan had been exporting cement brought down exports via sea to 2.44 million tons as opposed to 3.62 million tons last year.
Cement sales in domestic markets in June rose 9.2% to 2.96 million tons compared to 2.71 million tons in the same month of previous year.
The comparatively lower growth in June came primarily because of a slowdown in construction activities in Ramazan. Exports during the month were 387,060 tons against 552,867 tons in June 2015, showing a decline of 30%. Total sales in June stood at 3.35 million tons compared to 3.26 million tons in the corresponding month of last year, up just 2.57%, mainly due to the substantial fall in exports.
Though the cement industry closed financial year 2015-16 on a positive note, the only sour point was the additional tax imposed in the budget for 2016-17 that led to an increase of Rs35 per bag in the cement price.
Industry players fear the additional excise duty might dampen construction activities in the country. They argue there is no need to increase the tax as cement is already the most heavily taxed commodity in Pakistan.
Cement sales jump to record high
They apprehend that Iranian cement may make further inroads into the Pakistan market in view of lax border checks on smuggling and lack of control over under-invoicing.
The cement industry lost a volume of one million tons in sales because of arrival of smuggled Iranian cement in Balochistan and other coastal areas. “The government should support cement manufacturers in winning back markets by giving freight and transportation subsidy, which will enable them to compete at the global level,” said a spokesman for the association of manufacturers in a statement.
Published in The Express Tribune, July 3rd, 2016.
Cement sales in the just-ended financial year 2015-16 recorded a growth of 9.82% as volumes stood at 38.87 million tons compared to 35.34 million tons in the previous year.
According to data released by the All Pakistan Cement Manufacturers Association, the industry sold 33 million tons in domestic markets in 2015-16, a robust growth of 17.01% compared to sales totalling 28.2 million tons in the previous year.
Cement sales continue to shine
Exports, however, fell 18.38% to 5.87 million tons in FY16 compared to export of 7.2 million tons in the previous year.
The weakening exports were the result of 15.1% decline in shipments to Afghanistan and 32.68% drop in shipments to other countries via sea during the year. Exports to India, however, rose 42.53% to 992,631 tons.
An unstable security situation in Afghanistan and influx of Iranian cement restricted exports to Kabul to 2.44 million tons compared to 2.87 million tons in the previous year, say industry players.
Likewise, increased competition at the global level coupled with economic slowdown in countries to which Pakistan had been exporting cement brought down exports via sea to 2.44 million tons as opposed to 3.62 million tons last year.
Cement sales in domestic markets in June rose 9.2% to 2.96 million tons compared to 2.71 million tons in the same month of previous year.
The comparatively lower growth in June came primarily because of a slowdown in construction activities in Ramazan. Exports during the month were 387,060 tons against 552,867 tons in June 2015, showing a decline of 30%. Total sales in June stood at 3.35 million tons compared to 3.26 million tons in the corresponding month of last year, up just 2.57%, mainly due to the substantial fall in exports.
Though the cement industry closed financial year 2015-16 on a positive note, the only sour point was the additional tax imposed in the budget for 2016-17 that led to an increase of Rs35 per bag in the cement price.
Industry players fear the additional excise duty might dampen construction activities in the country. They argue there is no need to increase the tax as cement is already the most heavily taxed commodity in Pakistan.
Cement sales jump to record high
They apprehend that Iranian cement may make further inroads into the Pakistan market in view of lax border checks on smuggling and lack of control over under-invoicing.
The cement industry lost a volume of one million tons in sales because of arrival of smuggled Iranian cement in Balochistan and other coastal areas. “The government should support cement manufacturers in winning back markets by giving freight and transportation subsidy, which will enable them to compete at the global level,” said a spokesman for the association of manufacturers in a statement.
Published in The Express Tribune, July 3rd, 2016.