Pakistan: cement dispatches rise 10.6% YoY in year to May 2016

Pakistan: cement dispatches rise 10.6% YoY in year to May 2016

Cement dispatches in Pakistan totalled 35.5Mt in the period July 2015 to May 2016, up 10.55 per cent on the corresponding period of last fiscal year, the All Pakistan Cement Manufacturers Association (APCMA) has announced. The APCMA reports that the growth in consumption is solely due to higher domestic demand.

Overall domestic dispatches from plants in northern Pakistan increased by 16.6 per cent to 24.7Mt. Dispatches from southern plants rose more quickly – by 23.7 per cent – but volumes remain much smaller, at 5.4Mt. In all, domestic demand increased by 17.8 per cent during the 11 months of the current fiscal year, which runs to the end of June.

Exports dropped by 17.4 per cent to 5.5Mt in the same period, having fallen from 6.6Mt during same period of FY201415.

In May 2016 domestic dispatches increased by 22.8 per cent to 3.1Mt compared with 2.49Mt in May 2015. Exports were down slightly, at 558,000t against 560,000t in the previous year.

The APCMA said that it opposed plans to increase the Federal Excise Duty (FED) on cement, as envisaged in the current budget, as this ran counter to its efforts to reduces taxes and thereby raise domestic consumption.

The Association further warned that the proposed change in FED would increase the trade in smuggled cement into Pakistan. This year’s federal budget saw FED on cement change from a five per cent surcharge to a flat rate of PKR1000/t (US$9.60/t). The APCMA stated that would add PKR34 (US$0.33) to the price of a bag of cement and warned that this could negatively impact on consumption.

Declining exports are another of the industry’s concerns. While volumes to neighbouring India increased by 33.4 per cent – albeit from a low base – exports to Afghanistan fell by 10.3 per cent and those to other destinations by 32.4 per cent in the first 11 months of the fiscal year. The APCMA called on the government to provide the industry with incentives to restore its market share in Afghanistan and boost export earnings.