LAHORE: The cement sector maintained the same pattern of sales in the past six months as the northern region excelled in domestic supply but performed poorly in exports while the southern region performed better in exports but its performance in the domestic market was dismal.
The wide difference in local cement consumption in the northern and southern parts of the country depicts a lopsided growth pattern in the economy.
According to statistics released by the All Pakistan Cement Manufacturers Association (Apcma), cement sales in the country stood at 24.75 million tons in first six months of the current fiscal year (July-December).
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They were 6.51% higher than 23.24 million tons of cement sold in the corresponding period of previous fiscal year.
Domestic consumption registered an increase of 3.54% to 20.37 million tons against 19.68 million tons in the same period of last year.
Cement exports in six months increased over 22% to 4.38 million tons from 3.56 million tons last year.
Mills based in the north sent 17.41 million tons of cement to the domestic market in the period under review, an increase of 11.65% over the same period of previous year.
Exports from the north could reach only 1.42 million tons, a decline of 3.85% compared to the same period of previous year. The southern region managed to send 2.97 million tons of cement to the domestic market in the six months under review, which was 27.41% lower than the dispatches in July-December 2018.
It is interesting to note that exports from the south in the past six months almost matched the local consumption in the region. Exports came in at 2.96 million tons, showing a growth of 41.87%.
“The industry is sitting on massive underutilised capacity and at this rate, it will only manage to sell just over 47 million tons of cement this year against the installed capacity of 59.65 million tons,” said an Apcma spokesperson.
“This situation will not trigger any investment and expansion in the industry and employment in the sector will gradually decrease,” he added.
To support the sector, he said, the government should start work on the Public Sector Development Programme and announce housing projects, which would boost contribution of the construction sector and enhance job opportunities for the skilled and unskilled labour.
Cement sales rose 10.69% to 4.31 million tons in December 2019 from 3.89 million tons in December 2018. During the month, the domestic consumption increased 7.16% to 3.54 million tons as opposed to 3.3 million tons in December 2018.
Exports registered an impressive growth of 30.38%, rising from 0.59 million tons in December 2018 to 0.77 million tons in December 2019.
Cement mills based in the northern part of the country sold 3.17 million tons, 11.2% higher than 2.85 million tons in December 2018. Domestic sales rose from 2.62 million tons in December 2018 to 2.96 million tons last month.
Published in The Express Tribune, January 3rd, 2020.