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Cement production gains optimum pace

LAHORE: The cement industry operated at 88.18% of its installed capacity in the first quarter of this fiscal year, allowing sales of 10.348 million tons of cement, according to data released by All Pakistan Cement Manufacturers’ Association (APCMA).

Analysts believe the sector is well-poised to cross the 40-million ton barrier this year.

The APCMA data reveals that 3.199 million tons of cement was sold in September 2017, up 4.61% from September 2016, with a 10.33% increase in domestic consumption of the commodity being the main driver. Hence, the export sector continued to register a huge decline, decreasing 23% in September compared to the same month of the previous year.

The local sales from mills based in northern parts of Pakistan stood at 2.367 million tons, 12.05% higher than 2.113 million tons in the previous year. However, exports from the region fell 16.27% from 0.368 million tons in September 2016 to 0.308 million tons in September 2017.

Mills based in southern regions posted a meagre increase of 1.77% in local sales from 0.423 million tons in September 2016 to 0.431 million tons in September 2017. Exports from the region dropped considerably to 0.093 million tons from 0.155 million tons in the same month of last year, registering a decline of 39.63%.

Of the 10.348 million tons sold in the first quarter the north zone’s share was 7.522 million tons locally, which is 22.83% higher than the corresponding quarter of last year. The region during this period exported 0.953 million tons of cement, which is 7.41% less than the exports during same period last year; ie 1.029 million tons.

The mills located in the south zone sold 1.539 million tons cement in the first quarter of this fiscal year, 17.76% higher than the corresponding period of last fiscal year.

Its exports during the same period were 0.334 million tons, which is a massive 35.22% less than last year ie 0.516 million tons.

APCMA spokesperson expressed dismay at the continued decline in exports particularly from southern part of the country despite being closer to the seaport. He said that robust construction activities within the country are supporting the cement sector but idle capacity still exists, which can be used for increasing cement exports with appropriate facilitation by the government.

“The cement production capacities are likely to increase in near future and the industry would require an export base to operate at optimum capacity,” he added. In the past, the government had a scheme of ‘freight subsidy’, which allowed cheaper transport of cement from factories to the seaport for eventual export.