Domestic cement demand dips as growth slows down

Total sales decline 6.7% to 4.34 million tons in March 2019

LAHORE: The cement sector continued to suffer from a lack of domestic demand due to slowdown in economic growth, lower development spending and delay in the launch of government’s low-cost housing scheme.

Usually, cement consumption is at its peak in March as construction activities surge due to pleasant weather and urgency in completing government’s development work before the end of a fiscal year. However, total sales in March 2019 declined 6.7% to 4.34 million tons from 4.65 million tons in the same month of previous year.

According to data released by the All Pakistan Cement Manufacturers Association (APCMA), the downward trend in domestic consumption continued as it went down to 3.858 million tons in March 2019 from 4.26 million tons in March 2018. Although exports continued to increase, the growth of 23.08% in Match was the lowest in the last six months.

Domestic consumption in northern parts of the country continued to decline as it was only 3.071 million tons last month against 3.543 million tons in the same month of previous year. Exports from the plants based in the northern region also fell to 0.131 million tons in March 2019 from 0.218 million tons in March 2018.

Domestic sales from mills in southern parts of the country stood at 0.787 million tons in March 2019 as compared to 0.717 million tons in March 2018. Exports from the region also increased from 0.173 million tons to 0.350 million tons in March 2019.

The most worrying aspect for the cement industry is the continued slump in the northern region where local sales dropped over 10% in the past nine months from 25.887 million tons in 2017-18 to 23.199 million tons in the corresponding period of current fiscal year. On the other hand, local sales from the mills situated in the southern region increased in the first nine months of current fiscal year by 15.16% to 6.248 million tons from 5.426 million tons in Jul-Mar 2017-18.

“The cement industry has been under pressure this fiscal year as development expenditure has been slashed by 40% from last year. However, we were pinning hopes on the announcement of a programme to build five million low-cost houses over the next five years but this project has yet to start,” said a spokesman for the All Pakistan Cement Manufacturers Association (APCMA).

He added that the government should start the project as soon as possible as it was the only chance to step up cement production in the current scenario. 

Published in The Express Tribune, April 5^th, 2019.

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