Cement sales stagnate over the last four years

Representative bemoans lacklustre growth.

LAHORE: Cement manufacturers are ruing past decisions to increase production capacities. Cement consumption has stagnated over the last four years, while exports are on a constant decline; forcing the sector to operate at no higher than 69 per cent installed capacity.

“The industry sold 20.5 million tons of cement in the first eight months of the current fiscal year, recording a nominal rise of 3.48 per cent against dispatches of 19.74 million tons during the same period last year,” a spokesman for the All Pakistan Cement Manufacturers Association (APCMA) noted.

According to the spokesman, plant capacities had been increased during the period when the economy was booming. Most expansion had taken place in industries located in the northern part of the country, where Afghanistan is the only export market; albeit with limited potential. Exports to India had been limited due to non tariff barriers, he said.

He regretted the fact that growth during the past four years registered much below expectations, while the government also failed to provide funds for vital infrastructure.

Meanwhile, fierce competition between millers with the capacity to overproduce forced cement prices to grow behind inflationary figures. Coupled with costs of input driven upward by inflationary pressures and currency devaluation, the balance sheet has only worsened for the sector, he added.

Even exports, that provided some relief to the industry in the past, have declined rapidly over the first eight months of the current fiscal year, he said.

Exports as a whole declined by 5.57 per cent to 5.62 million tons, from 5.95 million tons in the corresponding period last year, the spokesman noted. Meanwhile exports to India, following normalising trade ties, have surged 39.48 per cent, he said.

Published in The Express Tribune, March 8^th, 2012.