Cement sales inch down for first time in FY17

Fall in consumption comes following 46% slump in exports


Our Correspondent March 07, 2017
The growth figures in the cement sector are not mere positive sentiments but concrete numbers. PHOTO: FILE

LAHORE: Though cement consumption grew in the domestic market in February, overall sales of the industry edged down for the first time in the current financial year in the wake of a massive 46% decline in exports.

According to latest data, cement consumption in February 2017 totalled 3.435 million tons, down 0.41% compared to the consumption of 3.449 million tons in the corresponding month of previous year.

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Domestic consumption in the month stood at 3.181 million tons, up 6.69%. Of this, 2.580 million tons were sold by mills based in northern parts of the country whereas 0.601 million tons were marketed by southern mills.

Exports in February 2017 slumped to 0.254 million tons, down 45.69% from shipments in February 2016.



In the first eight months of financial year 2016-17, cement manufacturers sold 26.339 million tons with a year-on-year growth of 6.36%. In the period, domestic consumption rose 9.12%, but exports fell 8.54%.

In the north, cement consumption during Jul-Feb FY17 increased 8.26% whereas in the south it rose 13.15%. In contrast, exports from the north fell 2.98% compared with a decline of 18.21% in shipments from the south.

“Clinker and cement are being manufactured in Pakistan and are abundantly available; it is surprising that the list of locally manufactured goods, notified by the Federal Board of Revenue vide Customs General Order No 11 of 2007, does not include cement,” a spokesman for the All Pakistan Cement Manufacturers Association said in a statement.

On the other hand, he said, a lower customs duty of 10% and 20% was imposed on the import of clinker and cement and due to cheap energy cost in neighbouring countries, low-quality cement was being dumped in Pakistan.

He underlined the need for increasing the customs duty to 35% in an effort to support local manufacturers. Apart from this, imports should not be allowed until exporters register themselves with the Pakistan Standards and Quality Control Authority (PSQCA) and it certifies the quality of cement, as being done by India and all other importing countries.

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Pakistan has already lost a major chunk of its market in Afghanistan to Iranian cement as high energy cost makes cement more expensive.

The spokesman claimed that electricity and gas costs in Pakistan were the highest in the region, while additional duties on the import of coal - a vital input in cement production - nullified the impact of lower coal prices in the global market.

On the domestic front, he added, high taxes encouraged some people to smuggle or import Iranian cement through under-invoicing.

Published in The Express Tribune, March 7th, 2017.

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