Domestic cement sales fall 16.7% in March

Exports grow at slow pace owing to worldwide spread of coronavirus

LAHORE: In line with expectations, the spread of coronavirus in Pakistan took its toll on domestic cement consumption, which declined 16.7% in March, while exports grew at a sluggish pace of 5.27% as global markets were also bearing the brunt of the virus.

According to data released by the All Pakistan Cement Manufacturers Association (Apcma) on Friday, the cement sector sold 3.72 million tons in March 2020, which was 14.26% lower than sales of 4.34 million tons in the corresponding month of previous year.

On the domestic front, cement offtake dipped to less than 3.2 million tons compared to 3.85 million tons in March 2019. Exports, however, inched up slightly from 0.48 million tons in March 2019 to 0.51 million tons in March 2020.

The increase in cement exports came despite the loss of Indian market. Exports to India have dropped to zero during the current fiscal year while in the first nine months of previous year, Pakistan had exported 0.72 million tons of cement to Delhi.

Cement mills based in the north sold 2.75 million tons locally in March 2020, which was almost 10.5% lower than sales of 3.02 million tons in the same month of last year.

In line with the current trend, exports from north-based mills also decreased 18.85% to 0.11 million tons in March from 0.13 million tons in March 2019.

The southern region of the country reported a substantial decline of 40.96% in domestic sales as they dipped from 0.79 million tons in March 2019 to 0.46 million tons in March 2020.

Exports, on the other hand, registered a rise of 14.32% to 0.4 million tons last month as opposed to 0.35 million tons in March 2019.

Experts in the cement industry have said that in the wake of the lockdown extended till April 14, economic activities would remain subdued.

"Cement industry was also hoping for a relief package from the government because it was becoming extremely difficult to sell the commodity during the lockdown," an expert said.

The prime minister's relief package for the construction sector, unveiled on Friday, will help increase cement consumption in the country.

However, the cement industry is hoping for a reduction in the federal excise duty, which is already very high in Pakistan compared to the region.

Moreover, industry experts also demanded that additional government levies, slapped on the sector during the current fiscal year, and electricity charges should be reduced.

Apcma spokesman added, "Overall, in the first nine months of this fiscal year, the industry managed to sell 37.04 million tons of cement, which was 7.06% higher than the 34.59 million tons sold during July-March FY19."

Domestic consumption during the period amounted to a little over 30 million tons while exports amounted to 6.5 million tons. The domestic cement offtake increased 3.82% during the period while exports registered a considerable rise of 25.63%.

Published in The Express Tribune, April 4^th, 2020.

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