Pakistan cement records a 2% uptick in dispatches in FY20

Pakistan cement records a 2% uptick in dispatches in FY20
07 July 2020

Pakistan’s cement industry during the FY19-20 (July 2019-June 2020) recorded a rise of two per cent to 47.81Mt in total cement dispatches from 46.88Mt in FY18-19. All Pakistan Cement Manufacturers Association (APCMA) attributed this growth to the strengthening of higher export growth, which reached 19.8 per cent with exports surpassing the 7Mt mark after a long time. However, the domestic consumption contracted by almost one per cent during this fiscal year, the first such decline in the last six years, remarked an association spokesperson.

After posting a decrease for three consecutive months, the easing of lockdown in the country saw  cement dispatches increase by 29.9 per cent in June 2020 to 4.623Mt from 3.557Mt in June 2019, ending the FY19-20 on a positive note.

Breakdown of June 2020
According to the data released by APCMA, the domestic cement uptake increased by a considerable 19.6 per cent to 3.835Mt in June 2020 from 3.206Mt in June 2019. Moreover, exports also rose by 123.9 per cent from 0.351Mt in June 2019 to 0.787Mt in June 2020.

Domestic cement consumption in the north was 3.384Mt in June 2020 against 2.75Mt in June 2019. However, exports from the north declined to 46,025t this June, compared with 0.145Mt last June. The scenario was the opposite in the south, where domestic consumption fell to 0.451Mt from 0.455Mt in June 2019, but exports increased from 0.206Mt in June 2019 to 0.742Mt in June 2020.

Full-year FY19-20
During the July 2019-June 2020 period, the performance of cement units in different zones showed the strength of the southern zone in exports and the northern zone in local consumption. In FY19-20 northern zone mills dispatched 34.327Mt of cement to the local market, which grew by 6.1 per cent YoY. However, exports from the north were down 22 per cent YoY to 1.97Mt  of cement. The region suffered due to protective policies of the Indian government and Afghan market, as well as the decline in construction activities in the landlocked country.

In the southern zone, the grinding units were severely hit by low consumption in the region as their dispatches declined by 29.4 per cent to only 5.637Mt. However, exports registered a healthy increase of 46.5 per cent as the south exported 5.877Mt of cement in FY19-20. Cement exports were higher than local consumption perhaps for the first time in history.

APCMA applauds government incentives
“The higher uptake in June has provided a hope that the new fiscal year would be better as a result of the incentives provided to the construction sector,” said a spokesman of APCMA. He appreciated the reduction in excise duty on cement but has asked for the complete withdrawal of excise on the commodity as it is a punitive duty imposed to curb the use of harmful items.

Published under Cement News