The global financial crisis last year kept Pakistani cement industry under pressure as exports were down by minimal 0.89 per cent YoY to stand at 10.65Mt in the closing fiscal year, as compared to 10.75Mt in the last fiscal year (FY) 2008-09.
The figures updated by All Pakistan Cement Manufacturers Association (APCMA) on its website showed the closing fiscal year could not meet the expectations of cement industry as financially- hit export markets coupled with government non-development policies resisted exports from crossing the last year’s export number, sources told Daily Times.
APCMA said that during FY09-10, the Middle East markets including UAE witnessed a huge fall in real estate business affecting Pakistani exports. Whereas the late announcement of inland freight subsidy by the government to exporters did not allow exports to grow.
Afghanistan remained the major export market – with a growth of 27 per cent YoY i.e. 4.01Mt, as compared to 3.14Mt last year. Exports to India witnessed an increase of 14 percent to stand at 0.72Mt as compared to 0.63 percent previous year.
“Despite recession, the country has been able to attract new markets including Qatar, Iraq and some of African countries but if the government doest not provide better incentives to industry and allocation to PSDP does not increase, exports may face trouble in the next fiscal year”, sources said.
However, the local cement dispatches witnessed an increase of 14 percent to stand at 23.53 metric tonnes as compared to 20.53 metric tonnes in FY 2008-09, the data shows.
“Economic slowdown, uncertain political and security situation along with budgetary constraints hampered infrastructure growth as well as private sector development projects in FY 2010”, Furqan Punjani, analyst at Topline Research said.
An overall increase of 3-4 per cent in exports may be witnessed in FY 2010-11, coupled with an increase of 15 to 20 per cent in local dispatches on the backdrop of higher allocation of PSDP and construction of dams, he said. He said there are still reservations about export markets like India and Middle East but exporters would have to focus on new markets to enhance exports. About the reason behind this change, he said cement companies are tapping the African markets owing to better opportunities there.
He said the impact of inland freight subsidy being given by the government of Pakistan would be seen in the coming months.