Cement crumbles against economy

Domestic sales posted decline of 16.77%, while exports declined by 48.86%

LAHORE:

Sales of Pakistan’s cement industry fell considerably in the July- Dec 2022 period owing to a slump caused by the floods and economic uncertainty in the country.

According to data released by the All Pakistan Cement Manufacturers Association (APCMA), the industry recorded total despatches (domestic and exports) of 21.764 million tonnes during the first six months of current fiscal year, that is 20.73% lower than 27.456 million tonnes despatched during the corresponding period of the last fiscal year.

Domestic sales during this period were 20.030 million tonnes against 24.065 million tonnes in the same period last year, showing a decline of 16.77%.

Export despatches were also down by 48.86%, dropping to 1.734 million tonnes during the first six months of the current fiscal year. During the same period last year, exports hit 3.391 million tonnes.

During the month of December 2022, cement sales declined by 15.55%. Total Cement despatches during December 2022 were 3.881 million tonnes against 4.595 million tonnes despatched during the same month last year.

Local cement despatches made by the industry during the month of December 2022 were 3.676 million tonnes, compared to 4.057 million tonnes in December 2021, showing a decline of 9.41%. Export despatches also witnessed a massive decline of 61.88% as volumes came down from 538,002 tonnes in December 2021 to 205,061 tonnes in December 2022.

In December 2022, North based cement mills despatched 3.010 million tonnes of cement, showing a decline of 11.60% against 3.405 million tonnes sold in December 2021. South based mills despatched 870,355 tonnes of cement during December 2022, which was 26.86% less than the despatches of 1.190 million tonnes recorded during December 2021.

Besides, North based cement mills despatched 2.956 million tonnes of cement in the domestic markets in December 2022, showing a decline of 12.48% against 3.377 million tonnes despatched in December 2021. South based mills despatched 719,721 tonnes cement in the local markets during December 2022, 5.86% higher, compared to the despatches of 679,868 during December 2021.

Furthermore, exports from North based mills increased by 95.18% as the volume increased from 27,885 tonnes in December 2021 to 54,427 tonnes in the same period of 2022. Exports from the South zone mills, however, dropped by 70.47% to 150,634 tonnes in December 2022 from 510,117 tonnes during the same month last year.

The mills in the North reported domestic sales of 16.522 million tonnes during the first six months of the current fiscal year, showing a reduction of 18.06% from the sale of 20.163 million tonnes in July-December 2021. Exports from the North increased by 6.29% to 578,074 tonnes during July-December 2022, compared with 543,888 tonnes exported during the same period last year. Total despatches by the North based mills declined by 17.42% to 17.100 million tonnes during the first six months of the current financial year from 20.707 million tonnes during the same period of the last financial year.

Domestic despatches by the South based mills during July-December 2022 were 3.508 million tonnes, showing a reduction of 10.10% compared to the 3.902 million tonnes of cement despatched during the same period last year.

Exports from the South mills also declined by 59.39% to 1.156 million tonnes during July-December 2022, compared with 2.847 million tonnes exported during the same period last year. Total despatches by the mills in the South went down by 30.90% to 4.664 million tonnes during the first six months of the current financial year. During the same period last year, the total despatches recorded were 6.749 million tonnes.

An APCMA spokesperson said the current economic turmoil has impacted cement consumption significantly. “Inflation has played havoc with the pockets of consumers, and as a result, new construction projects, including housing, are appearing fewer in number, while the routine maintenance of residences has been postponed for better financial times. Even on the exports’ front, the Russia-Ukraine war did the industry no favours,” he said.

Published in The Express Tribune, January 5^th, 2023.

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