Cement industry reaches highest level of capacity utilisation

Increase in domestic consumption offsets fall in exports during November

Our Correspondent December 05, 2016
Increase in domestic consumption offsets fall in exports during November. PHOTO: REUTERS

LAHORE: Pakistan’s cement industry achieved its highest capacity utilisation of 98.61% in November, recording sales of 3.749 million tons against 3.377 million tons in the same month last year.

Domestic consumption in November 2016 stood at 3.270 million tons compared to 2.843 million tons in the same month last year. Exports fell 10.39%, from 0.533 million tons in November 2015 to 0.478 million tons in November 2016, but domestic growth backed the overall increase.

Cement industry poised for continued growth

According to data released by All Pakistan Cement Manufacturers Association (APCMA), the industry dispatched 16.251 million tons of cement during the first five months of the ongoing fiscal year, 9.89% higher than 14.788 million tons during the corresponding period of last fiscal.

During the first five months of the current fiscal, domestic dispatches were 13.709 million tons, 12.13% higher than the same period last year.

Export dispatches during the first five months of current fiscal were 2.542 million tons, a decline of 0.79% compared to the same period of last year.

Cement mills located in the northern part of the country dispatched 11.305 million tons for domestic consumption and 1.702 million tons for export, reflecting a growth of 11.05% and 4.30%, respectively.

The cement mills based in the southern part of the country dispatched 2.404 million tons for domestic use and 0.839 million tons for export, reflecting a growth of 17.49% and decline of 9.72%, respectively.

The industry has been observing a decline in exports since the beginning of this fiscal year and the worst of that was seen in November this year where total export dispatches were 0.479 million tons which is 10.35% lower than 0.534 million tons in November 2015.

Reason for declining exports

APCMA spokesperson has pointed out that exports are likely to remain under pressure as Afghan market is penetrated by Iran and export by sea is on the decline whereas exports to India have a positive trend.

However, he expressed satisfaction at the continued growth in domestic cement dispatches. He said that even the crisis in the property sector has not impacted construction activities.

Cement demand: Industry utilises highest capacity in almost a decade

The huge infrastructure projects undertaken by both federal and provincial governments is icing on the cake. “Consumption of cement has increased across the board more so in south where the general perception is that the activities are slow.”

He said that coal is a widely used fuel in the production of cement and its increasing price during last few months has a significant impact on input cost whereas recent increase in oil prices has further increased the cost of cement production.

Published in The Express Tribune, December 6th, 2016.

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Sami | 4 years ago | Reply The reason for declining exports is huge domestic demand! They are producing at almost full capacity and don't have much left over for export.
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