Cement exports decline 20%

Mills in the north lose almost all export orders through sea because of exorbitant transportation charges.

KARACHI: Cement sales in the domestic market rose seven per cent to 1.91 million tons in January compared with December 2010 while exports fell 20 per cent to 0.57 million tons, shows data released by the cement manufacturers association.

However, in the first seven months (July to January) of the current fiscal year, cement sales in the domestic market fell 9.63 per cent to 12.01 million tons while exports were down 17.03 per cent to 5.19 million tons.

Total cement sales for the seven-month period were 17.2 million tons, a decline of 12.01 per cent, compared to the corresponding period of last fiscal year. The decline is in contrast to the previous period of 2009-10, when local consumption of cement increased by 14.7 per cent, but overall increase in sales was 9.3 per cent due to a decline in exports.

Out of the total operational production capacity of 41.23 million tons, the northern part of the country produces 34.26 million tons, while the southern part produces 6.97 million tons. Another 2.68 million tons of capacity will be added this fiscal year, with the commencement of operation at the new Fauji Cement plant.

The All Pakistan Cement Manufacturers Association (APCMA) said the capacity utilisation has constantly declined since 2004-05 when it reached the peak of 91.32 per cent. In 2009-10, it dropped to 76.53 per cent, whereas in the seven months of the current fiscal year, it was 71.55 per cent.

The mills operating in the north lost almost all export orders through sea because of exorbitant transportation charges from plants to seaports, said a spokesperson for APCMA. “The transportation cost has made cement export unviable for plants located in upper parts of the country,” official added.

Published in The Express Tribune, February 9^th, 2011.