Domestic cement sales increase 10.85% in August

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LAHORE: Buoyancy in the domestic cement market continued unabated in August too as local sales rose 10.85% compared to sales in the corresponding month of previous year.

However, exports nosedived 26.47%, reducing the overall sales growth to 5.05% only.

According to data for August 2017, cement sales totalled 3.766 million tons compared to 3.585 million tons in August 2016.

In August 2017, domestic cement sales in the northern region stood at 2.731 million tons against 2.495 million tons in the same month of previous year. However, sales in the southern region were recorded at 0.625 million tons as opposed to 0.532 million tons in the same month of last year.

Exports from the north were 0.307 million tons in August 2017 against 0.355 million tons in August 2016 whereas exports from the south stood at 0.103 million tons compared to exports of 0.203 million tons last year.

A spokesman for the All Pakistan Cement Manufacturers Association revealed that capacity utilisation in August 2017 was above 96% as domestic cement supplies were constantly increasing, which was a good sign. “This indicates that the economy is in a good shape,” he added.

In the first two months of the current financial year, the industry sold 7.148 million tons of cement, registering an overall growth of 20.81% over the corresponding period of previous year

During July and August FY18, domestic consumption increased 27.95%, but exports dipped 13.39%. In the north, domestic cement consumption during the two months rose 28.51% and in the south it increased 25.41%.

In contrast, exports from the north declined 2.47% whereas from the south it fell 25.41%. “This should be a matter of concern for the authorities because in the past south-based mills, being nearer to the sea, were the leading cement exporters,” the spokesman said.

The constant decline in cement exports is a cause for concern for the industry as well. He pointed out that the decline in cement exports was in line with the overall drop in non-textile exports, which indicated lack of competitiveness of the manufacturing sector.

The spokesman called for a review of government policies, regulations and taxes on all non-textile export sectors as export revival would strengthen domestic manufacturing sectors and give a boost to the economy.

Exports to Afghanistan, a major market, during July-August FY18 increased 21.41%. However, the increase was more than offset by a fall of 21.76% in exports to India and 37.53% in shipments to other countries.