Cement sales fall seven per cent

Industry utilisation falls to 75% of total production capacity.

KARACHI:

Cement sales have dropped seven per cent in the first 11 months (July-May) of the current fiscal 2010-11, leading to a decline in utilisation of manufacturing capacity and losses to the industry, stakeholders say.

According to the All Pakistan Cement Manufacturers Association, domestic cement sales decreased seven per cent to 19.94 million tons during July-May 2010-11 compared to the same period last year.

Sales in the northern region of the country declined 11.65 percent mainly due to floods and low demand. However in the southern region, which is close to the seaport and costs less in terms of transportation charges, sales increased 20.46 per cent on the back of buoyant demand, said a spokesperson for the association.

He said the industry utilised only 75 per cent of the installed production capacity of 41.23 million tons this year, leaving manufacturers with a surplus of 9.32 million tons. To utilise the surplus, he urged the government to persuade India to allow cement imports from Pakistan through the Wagah border crossing.

He said the industry had suffered net losses of Rs1.4 billion in the first nine months of the current fiscal, mainly due to increase in prices of inputs like coal, furnace oil, electricity, paper bags, interest rate, diesel and transportation.

Eleven cement units suffered a loss of Rs4.86 billion while only three units, of which two are located near Karachi and are close to the seaport, earned profit of Rs3.56 billion. At the end of the last fiscal, industry debts to financial institutions amounted to over Rs132 billion.

Published in The Express Tribune, June 3^rd, 2011.