Cement production increased by 15.4% in August

Cement production in Pakistan increased by 15.4 percent to 1.51Mt in August 2005 compared to 1.31Mt during the same month last year mainly due to rising domestic demand, said a data released by All Pakistan Cement Manufacturers Association.

“Local sales of the cement have increased by 17.6 percent to 1.35Mt due to rising domestic demand,” the data said.

“Due to limited excess production capacity, exports remained stagnant at 0.16Mt. Capacity utilisation of the industry also remained impressively high at 94 per cent during August this year.”

The data said total dispatches during July-August 2005 stood at 2.94Mt, depicting an increase of 9.4 percent as compared to 2.68Mt dispatches in Jul-August 2004. it said the local sales have increased by 10.7 per cent, whereas, exports declined by a minor 1 per cent in last two months compared to the same period last year. Atif Malik, an analyst at Jehangir Siddiqui and Company said export prices have been on the rise and but volumes have witnessed a declining trend, mainly due to limited excess domestic production capacity of the local cement industry as domestic demand remained strong.

The total domestic installed capacity, which stood at 18.99Mt in July, stood at 19.23Mt at August end, showing an increase of around 0.24Mt, cushioned by 0.2Mt increase in production by Fauji Cement.

“We expect such additions in industry capacity on a regular basis, as de-bottlenecking and new capacities start materialising,” said Mr Malik, at Jehangir Siddiqui and Company. He said the government, in recent development, has allowed duty free cement import and the import does not pose a major threat to the local industry, as globally cement demand remains strong, he added.

“None of the regional countries have excess production capacity to export it to Pakistan and this can be witnessed from the fact that export prices of cement to Afghanistan have now touched all time high of $60-70 per tonne, even exceeding the local ex-factory prices,” said Mr Malik. staff report.