Cement industry capacity utilisation touches 99%

Domestic consumption surges 37% in January this year

Our Correspondent February 03, 2018
Domestic consumption surges 37% in January this year PHOTO: REUTERS

LAHORE: Domestic consumption of cement increased 37.3% in January 2018 on a year-on-year basis as construction activities continued to lead the economy and created employment for both skilled and unskilled workforce, according to data released by the All Pakistan Cement Manufacturers Association on Friday.

However, exports remained dismal which went down 7.82% from 0.376 million tons in January 2017 to 0.347 million tons in January 2018. Capacity utilisation for the month stood at 99.11%.

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Of the total cement dispatches of 4.084 million tons in January, the domestic consumption was 3.737 million tons.

Capacity utilisation of the industry in the first seven months of the current fiscal year reached 91.28% - the highest since 2004-05.

According to the association, the cement industry is quite hopeful that the present growth momentum will continue and absorb the upcoming production capacity of around 15 million tons in the next three to four years.

Cement consumption in the north zone was 3.018 million tons in January 2018, up 41.68% compared to the same month of previous year, which led the domestic growth.

This is for the second time this fiscal year that cement consumption in this zone has exceeded 3 million tons.

Consumption in the south zone was also robust at 0.719 million tons compared with 0.591 million tons in the corresponding month of previous year.

In the first seven months of fiscal year 2018, the cement industry dispatched 26.327 million tons against 22.904 million tons in the corresponding period of FY17.

The growth in domestic consumption in the seven months was 20.17%, but the overall increase in cement dispatches was restricted to 14.94% due to a 16.25% decline in exports.

During the period under review, diesel and coal prices have gone up continuously which increased the cost of production. Apart from this, competition with smuggled and imported cement has resulted in a steep decline in profit margins of the industry.

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In a statement, the association spokesman regretted that the government was not paying heed to the request of the industry to take steps for increasing exports and eliminating the smuggled or under-invoiced imports of cement.

He said the industry was managing the import threat through efficient operations and low profit margins.

"The government should take measures to increase cement exports and curb smuggling and under-invoicing to provide much-needed relief to the industry," he added.

Published in The Express Tribune, February 3rd, 2018.

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