Cement sales in Pakistan have dropped seven per cent in the first 11 months (July-May) of the current fiscal 2010-11, leading to a decline in utilisation rates and losses to the industry, the industry association says.
According to the All Pakistan Cement Manufacturers Association, domestic cement sales decreased seven per cent to 19.94Mt during July-May 2010-11 compared to the same period last year.
Sales in the northern region of the country declined 11.65 per cent mainly due to floods and low demand. However in the southern region, which is close to the seaport and costs less in terms of transportation charges, sales increased 20.46 per cent on the back of buoyant demand, said a spokesperson for the association.
He said the industry utilised only 75 per cent of the installed production capacity of 41.23Mt this year, leaving manufacturers with a surplus of 9.32Mt. To utilise the surplus, he urged the government to persuade India to allow cement imports from Pakistan through the Wagah border crossing.
He said the industry had suffered net losses of PKR1.4bn in the first nine months of the current fiscal, mainly due to increase in prices of inputs like coal, furnace oil, electricity, paper bags, interest rate, diesel and transportation.
Eleven cement units suffered a loss of PKR4.86bn while only three units, of which two are located near Karachi and are close to the seaport, earned profit of PKR3.56bn. At the end of the last fiscal, industry debts to financial institutions amounted to over PKR132bn.