High taxes lead to 25.68% drop in cement sales

Decline in dispatches impacts domestic, export markets; industry calls for urgent review

LAHORE:

The unprecedented tax hikes on cement have led to a significant decline in demand, with cement dispatches dropping by 25.68% in August 2024. According to the All Pakistan Cement Manufacturers Association (APCMA), total cement dispatches during August 2024 were 3.366 million tonnes, down from 4.528 million tonnes in the same month last year.

Domestic cement dispatches dropped by 27.54%, from 3.798 million tonnes in August 2023 to 2.752 million tonnes in August 2024. Export dispatches also fell by 16%, with volumes decreasing from 730,755 tonnes last year to 613,857 tonnes this August. Cement mills in the North saw a 22.20% drop in dispatches, sending out 2.530 million tonnes in August 2024 compared to 3.252 million tonnes in the previous year. Meanwhile, South-based mills dispatched 835,245 tonnes, a 34.54% decrease from the 1.276 million tonnes dispatched in August 2023.

Domestic dispatches from North-based mills fell by 24.70%, dropping from 3.088 million tonnes in August 2023 to 2.325 million tonnes this year. In the South, domestic dispatches plummeted by 39.91%, with only 426,289 tonnes sent out compared to 709,443 tonnes last year. While exports from North-based mills increased by 24.79%, rising from 164,195 tonnes in August 2023 to 204,901 tonnes in August 2024, exports from South-based mills dropped by 27.82%, falling from 566,560 tonnes last year to 408,956 tonnes this August.

For the first two months of the current fiscal year, total cement dispatches -- domestic and export -- were 6.375 million tonnes, 17.82% lower than the 7.758 million tonnes dispatched during the same period last year. Domestic dispatches fell by 20.73% to 5.214 million tonnes, while export dispatches dropped by 1.65% to 1.161 million tonnes.

A spokesperson for the APCMA highlighted the continuous decline in domestic cement dispatches over the past 12 months. He attributed the drop to higher taxes, economic uncertainty, and heavy monsoon rains that disrupted construction activities in August. "In the current budget, excise duty on cement doubled, alongside significant increases in federal and provincial taxes," the spokesperson noted, adding that no other industry has been taxed as heavily. The government must reassess its taxation policies to support the struggling construction sector, which is critical for employment and economic stability, he urged.