Cement dispatches increase 23.2%

Import duty on coal still hurting sector, says APCMA.

KARACHI:

Total cement dispatches have shown an increase of 23.2% during August 2014, compared to the same month of the previous year, according to data released by the All Pakistan Cement Manufacturers Association (APCMA).

Cement dispatches (local sales and exports) in August 2014 increased to 2.778 million tons as compared to 2.254 million in August 2013. Exports during August 2014 were 828,000 tons against 677,000 during the same period of the previous year.

Local cement sales to domestic markets during August 2014 were 1.95 million tons, compared to 1.57 million tons, showing an increase of 23.6%. A healthy growth was witnessed both in exports and domestic consumption despite the prevailing political turmoil in the country. The growth was registered in both northern and southern parts of the country. Exports from north increased from 437,917 tons last August to 502,845 this year, while cement exports in the southern region increased from 261,938 tons in August 2013 to 300,271 in the corresponding period this year.

An APCMA spokesman said that the negative domestic consumption in July 2014 was compensated with the rise in August, resulting in higher overall consumption. He added that exports suffered a decline of 32% in July 2014 and despite an increase of over 22% in exports during August, the overall exports in the first two months of this fiscal year declined by 6.7% to 1,331 million tons from 1,426 million tons during the same period of the previous fiscal year.

“Issues impacting the cement sector have still not been addressed by the government,” said the spokesman.

“The Federal Bureau of Revenue has not mitigated the tax burden put on the industry through previous year’s federal budget.”

The 1% import duty on coal in the recent federal budget (2014-15) has put further stress on the cost of fuel, as the cement industry consumes almost 95% of the 4.5 million tons of annual coal import.

“The industry has spent millions of dollars to convert furnace oil into coal to reduce the cost of production,” he said. “This can result in a loss of international market, which causes the foreign exchange earned by the cement exports to be at risk.”

He further added that the cement sector of the country is already facing grave issues including massive load-shedding, shortage of labour, slowdown of construction activities and less exports; therefore, this duty is just to add to the woes of the sector.

Published in The Express Tribune, September 7^th, 2014.

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