Cement despatches surge by 57.44% in July

Despite growth, APCMA raises concerns over rising production costs

LAHORE:

Cement despatches in Pakistan witnessed a remarkable increase of 57.44% in July 2023, providing some relief to the struggling construction sector. According to the data released by the All-Pakistan Cement Manufacturers Association (APCMA), the total cement despatches for the month reached 3.212 million tonnes, compared to 2.040 million tonnes during the same period last year. However, domestic despatches in July 2023 were approximately 20% lower than those in June 2023.

The surge in despatches was mainly driven by local cement sales, which recorded a substantial rise of 47.15%. Local cement sales reached 2.776 million tonnes in July 2023, compared to 1.887 million tonnes in July 2022. In addition, cement exports also experienced a massive jump of 183.91%, with volumes increasing from 153,517 tonnes in July 2022 to 435,854 tonnes in July 2023.

Breaking down the data further, cement mills in the northern region despatched 2.473 million tonnes of cement in July 2023, showing a growth of 46.54% compared to 1.688 million tonnes in July 2022. Meanwhile, mills in the southern region despatched 739,376 tonnes of cement in July 2023, marking a significant increase of 109.61% compared to 352,747 tonnes in the same month last year.

In the domestic markets, the northern-based mills despatched 2.351 million tonnes of cement in July 2023, representing a rise of 45.37% from 1.617 million tonnes in July 2022. In the southern region, domestic despatches reached 425,336 tonnes in July 2023, indicating a growth of 57.84% compared to 269,477 tonnes in July 2022.

The surge in exports was also notable, with exports from the northern region increasing by 73.41% and those from the southern region skyrocketing by 277.13%. Exports from the northern mills reached 121,814 tonnes in July 2023, up from 70,247 tonnes in July 2022. In the southern region, exports reached 314,040 tonnes in July 2023, compared to 83,270 tonnes in the same month last year.

Despite the positive outlook for the cement industry, a spokesperson for the All-Pakistan Cement Manufacturers Association expressed concerns over the rising cost of production. Increases in royalty rates, electricity prices, and fuel costs have impacted the sector’s profitability. The spokesperson emphasised that the country’s economic stability relies heavily on a stable government.

Furthermore, although the current fiscal year has started on a promising note, the domestic despatches in July 2023 were approximately 20% lower than those in June 2023, indicating a decline compared to the previous month.

Nevertheless, the cement industry remains optimistic, with expectations of investments in large-scale projects contributing to a better performance in the fiscal year ahead. Despite challenges, the industry’s growth in July 2023 is a positive sign for the construction sector and the broader economy.

Published in The Express Tribune, August 4^th, 2023.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.