Cement sales jump 38% in July 2020 in Pakistan

The new fiscal year has kicked off on an upbeat note for the cement sector as its sales soared by a healthy 37.8% to 4.838 million tons in July 2020 from 3.512 million tons in the same month of previous year on the back of buoyancy in both export and domestic markets.

The significant growth comes in the backdrop of only 1.98% increase in cement sales in fiscal year 2019-20, which was totally supported by exports. In fact, domestic cement consumption registered a decline of 0.94% in the last fiscal year.

According to data released by the All Pakistan Cement Manufacturers Association, the local offtake of cement increased by 32.67% to 3.953 million tons in July 2020 from 2.979 million tons in July 2019. On the other hand, exports registered a more impressive increase of 66.14% at 0.885 million tons from 0.533 million tons in the same month of last year.

The north zone, as usual, led the total growth in sales on the strength of its domestic market, which grew by over 38.86% to 3.435 million tons in July 2020 compared with 2.474 million tons in July last year. However, the export trend in the north zone was highly disappointing as total exports from north-based mills amounted to only 0.123 million tons, recording a decline of 46.93% compared with exports of 0.231 million tons in the previous year.

The decline came in the wake of a trade stand-off with India and slow construction activities in Afghanistan.

Meanwhile, the performance of south-based mills - situated near seaports - was quite the opposite. These mills could only dispatch 0.518 million tons of cement to the domestic market in July 2020, registering a nominal increase of 2.39% over sales of 0.506 million tons in the same month of last year.

However, the south-based mills made up for the slow growth in sales in the domestic market with an exponential 152.9% growth in exports to 0.762 million tons, which was 1.5 times the domestic sales in the southern part of the country.

Last year in July, cement exports from the south stood at only 0.301 million tons.

An APCMA spokesman said the increase in cement dispatches last month gave a much-needed boost to the industry after a disappointing last fiscal year. The spokesman added that increasing fuel and energy prices badly impacted freight cost and the overall cost of production.

“The government must focus on public sector development projects and announce housing schemes to boost construction activities so that employment and investment in cement and allied industries can be safeguarded,” he added.

Published in The Express Tribune, August 5^th, 2020.

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