The start of winter season, coupled with snowfall, in Afghanistan has resulted in a decline of six percent in Pakistan cement exports by the end of October. Sources in the industry have predicted a further decline ranging between 10 and 12 percent in the next four months. The decline in exports and stagnation in local consumption has already suggested to the cement manufacturers to bring down prices substantially. However, one would still praise the Monopoly Control Authority (MCA) for proposing a fine against the industry on account of forming a cartel, a charge denied by the industry.
According to figures collected by the Pakistan Daily Times, total dispatches for exports stood at 587,879t during July-October 2005 comparing with 554,003t during the corresponding period of the previous year, showing a decline of some 5.76 per cent. The local dispatches, however, have shown a rise of some 13 per cent during the same period from 4,845,219t in July-October 2004 to 54,78,796t in the same period of 2005.
The Ministry of Undustries had started negotiations with the All Pakistan Cement Manufacturers Association (APCMA) in July where the APCMA leadership had agreed to bring down exports’ level in order to meet the local demand. However, this commitment could only be met in October as no major difference in exports took place during three months before October.
Total exports in July 2005 were 130,000t against 132,000t in July 2004, which went up to 156,000t in August 2005 compared with 157,000t in August 2004, then it steeped down to 144,000t in September 2005 compared with 156,000t in September 2004 and finally declined to 123,000t in October compared with 142,000t in October 2004.
The stagnation in local consumption has brought down prices to Rs 295 per 50kg bag compared with Rs 315 per bag last month. The market sources pointed out that construction activity would continue to maintain its pace, as no major signs of torrential rains in plains of the country were expected in near future.
Pakistan’s cement industry is expanding at a fast pace and a total of US$1 billion investment has been made over the past one and a half year. The industry sources mentioned that a rapid expansion in manufacturing plants would double the capacity soon as new plants would be in place in near future, but this could also put the industry in trouble in case construction activity failed to keep the existing pace.