Cement sales touch record high at 4.2 million tons in October

Support comes from high domestic demand; exports remain unimpressive

LAHORE: Propelled by demand from new infrastructure projects in the country, overall cement sales touched a new peak at 4.222 million tons in October 2017, up 19.71% from the offtake of 3.526 million tons in the same month of the previous year, according to statistics released by the All Pakistan Cement Manufacturers Association on Friday.

Total sales in the first four months (Jul-Oct) of fiscal year 2017-18 reached 14.570 million tons, which was 16.53% higher than dispatches of 12.503 million tons in the corresponding period of previous year.

The increase came from the surge in domestic demand, though exports stood unimpressive and dropped 16.16%.

Domestic cement consumption rose 25.61% to 3.779 million tons in October 2017 whereas exports continued to decline as they went down 14.55% to 0.443 million tons.



"Higher cement consumption in the country is a sign of growing economy that is having positive impact on over three dozen industries connected with the construction sector," an association spokesman commented.

However, he said exports were below par which was a cause for worry because the industry still had idle capacity. "Almost all the decline in exports is via sea; shipments to India have also been affected but not to that extent," he said.

The spokesman pointed out that demand in the north zone stood surprisingly very high as consumption in the region hit 3.148 million tons in October 2017. "It is for the first time that the north zone has consumed more than three million tons in a month."

In October 2016, the consumption in the north zone totalled 2.489 million tons.



Cement demand in the southern region increased from 0.519 million tons in October 2016 to 0.631 million tons in October 2017.

Owing to the robust growth in domestic cement consumption in the first four months of FY18, the industry utilised over 93% of installed capacity.

"This is the highest capacity utilisation in the past 20 years, however, 1.08-million-ton capacity is still sitting idle," he said, suggesting this could have been consumed by exports had government policies been export-friendly.



He cautioned that higher cement consumption did not mean economic planners should ignore the challenges faced by the industry.

Among the challenges, he cited the country's tough regulations and said the industry was surviving because it had upgraded its technology that provided the strength needed to take any challenge head-on.

"Our quality is the best in the region. No cement can compete with Pakistani cement if imported at real and fair value after paying all levies. However, weak border controls and lax customs vigilance allow cement from across the border at unfair valuations," he added.

The spokesman asked the government to cut the rate of excise duty in order to give a further boost to demand. Similarly, the duty on coal imported by the sector should be brought on a par with other sectors.

Published in The Express Tribune, November 4^th, 2017.

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