The demand for cement increases in domestic market accelerated to 10.9% while export continue to decrease in performance and quality, registering a decline of 44.5% in May 2017.
This is the fourth consecutive decline in exports, which fell by 45.6% percent in February, 60.3% in March and 50.7% in April. This export performance has over shadowed the excellent uptake of cement in the domestic market.
According to data released by the All Pakistan Cement Manufacturers Association (APCMA), cement dispatches to domestic markets in May were 3.399 million tons, compared to 3.065 in the same month last year —an increase of 10.9%. Exports during May, 2017 were 0.309 million tons against 0.558 million tons during May, 2016 showing a reduction of 44.5%.
From July, 2016 to May, 2017, domestic cement consumption has increased by a healthy 10.7% to 37.589 while the export of cement declined by 21.2% to only 4.319 million tons. Cement exports have been on a constant decline since 2008-9 when it peaked at 10.8 million tons.
During May, 2017, exports to Afghanistan decreased by 53% from May last year to 0.097 million tons in May this year. An APCMA spokesperson expressed concern over the falling exports to Afghanistan.
Exports to India — which mostly take place through Wagah Border Crossing and the southern coast of India — also registered a fall of 15.2% from May, 2016.
The spokesperson regretted the government’s slapping of ‘undue’ additional taxes on cement. “This increase may hurt the industry’s growth that has been accelerating during the last 18 months,” he said. This decline in the overall growth, he added, was despite the fact that the domestic consumption of the industry increased by 23% in March, 9.5% in April and 10.5% in May. He apprehended that some of the decline in the domestic uptake was a result of duties slapped on the construction sector.
Industry experts have appealed to the government to take steps to boost the housing sector as currently the cement industry is mostly depending on infrastructure projects. They said that sustained growth in housing construction is essential to absorb the additional capacities that would be operational in two years. They urged the government to avoid disruptive policies that adversely impact construction growth in the country.