Cement plants running at lowest capacity in 10 years
Domestic sales rise 13%, exports fall 8% in December.
LAHORE:
Capacity utilisation of cement manufacturers in first six months of financial year 2011-12 reached its lowest level for the past ten years - at 69.67 per cent - as exports continued to drop overshadowing gains in domestic consumption, say industry officials.
Capacity utilisation of the industry stood at an encouraging 81.53 per cent in 2007-08, but since then it has gradually declined, to the dismay of cement manufacturers.
“The expected turnaround in economy did not happen, though the industry’s capacity continued to grow,” said a spokesman for the All Pakistan Cement Manufacturers Association (APCMA).
He pointed out that the cement industry had planned capacity expansion six years ago when the economy was moving ahead, but the economic weakness of recent years and slowdown in government’s development programme threatened the industry’s viability.
He said domestic demand in December was encouraging, showing a growth of over 13 per cent which offset the decline of 5.12 per cent in sales in November. However, exports remained under pressure as they fell 8 per cent in December. In six months (July-December), the decline in exports stood at 4.58 per cent.
Cement units, running in southern part of the country, recorded a healthy growth of 19.2 per cent in domestic sales in six months, but exports dipped 20 per cent, industry data shows.
In the northern part, where most of the cement manufacturing is concentrated, domestic sales rose 6 per cent and exports increased 2.51 per cent.
In the first quarter (July-September), seven cement manufacturing units suffered a loss before tax aggregating to Rs973 million while eight units earned profits of Rs1.001 billion. According to the spokesman, the cost of production of the industry has risen substantially, thanks to the increase in input prices, especially coal, furnace oil, diesel and electricity.
Published in The Express Tribune, January 7th, 2012.
Capacity utilisation of cement manufacturers in first six months of financial year 2011-12 reached its lowest level for the past ten years - at 69.67 per cent - as exports continued to drop overshadowing gains in domestic consumption, say industry officials.
Capacity utilisation of the industry stood at an encouraging 81.53 per cent in 2007-08, but since then it has gradually declined, to the dismay of cement manufacturers.
“The expected turnaround in economy did not happen, though the industry’s capacity continued to grow,” said a spokesman for the All Pakistan Cement Manufacturers Association (APCMA).
He pointed out that the cement industry had planned capacity expansion six years ago when the economy was moving ahead, but the economic weakness of recent years and slowdown in government’s development programme threatened the industry’s viability.
He said domestic demand in December was encouraging, showing a growth of over 13 per cent which offset the decline of 5.12 per cent in sales in November. However, exports remained under pressure as they fell 8 per cent in December. In six months (July-December), the decline in exports stood at 4.58 per cent.
Cement units, running in southern part of the country, recorded a healthy growth of 19.2 per cent in domestic sales in six months, but exports dipped 20 per cent, industry data shows.
In the northern part, where most of the cement manufacturing is concentrated, domestic sales rose 6 per cent and exports increased 2.51 per cent.
In the first quarter (July-September), seven cement manufacturing units suffered a loss before tax aggregating to Rs973 million while eight units earned profits of Rs1.001 billion. According to the spokesman, the cost of production of the industry has risen substantially, thanks to the increase in input prices, especially coal, furnace oil, diesel and electricity.
Published in The Express Tribune, January 7th, 2012.