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TRADE CHRONICLE<br />
Cement Industry<br />
Domestic cement despatches declined<br />
by 19.05 percent in <strong>Feb</strong>ruary<br />
Cement sector posted a double digit<br />
decline of 19.05 percent in the month of<br />
month as the domestic consumption<br />
declined by 19.05 percent from 3.479<br />
tons in <strong>Feb</strong>ruary 2018.<br />
Overall cement despatches in the eight<br />
months of this fiscal stood at 30.091<br />
million tons that was only 0.05 percent<br />
lower than the despatches of 30.106<br />
million tons achieved during the same<br />
period of last year. Out of this, exports<br />
during July-<strong>Feb</strong>ruary <strong>2019</strong> period were<br />
4.649 million tons which was 52.30<br />
percent higher than 3.053 million tons<br />
exported in the corresponding period<br />
last year.<br />
<strong>Feb</strong>ruary compared with corresponding<br />
month last year. According to data<br />
released by the All Pakistan Cement<br />
Manufacturers Association (APCMA),<br />
the cement industry despatched 3.325<br />
million tons in <strong>Feb</strong>ruary <strong>2019</strong> against<br />
despatches of 3.780 million tons in<br />
<strong>Feb</strong>ruary 2018. It seems that the domestic<br />
sector almost collapsed in last<br />
million tons in <strong>Feb</strong>ruary 2018 to just<br />
2.817 million tons in <strong>Feb</strong>ruary <strong>2019</strong>.<br />
Exports from the country overall increased<br />
by a healthy 69.07 percent<br />
year on year basis in <strong>Feb</strong>ruary. The<br />
industry exported 0.508 million tons<br />
of clinker & cement in <strong>Feb</strong>ruary <strong>2019</strong><br />
against exports of mere 0.301 million<br />
APCMA spokesman appealed the<br />
government to support the industry by<br />
minimizing duties and taxes, especially<br />
on exports to help the industry earn foreign<br />
exchange in these testing times.<br />
He also urged the government to restart<br />
spending on PSDP to boost not<br />
only consumption of cement and other<br />
construction materials but the work<br />
opportunities for skilled and unskilled<br />
labour.<br />
Cement exports from<br />
Pakistan grow in 7MFY19<br />
The Pakistan cement industry is facing a<br />
domestic drop in cement demand, but<br />
export data for 7MFY19 show overseas<br />
sales have been strong. Experts believe<br />
that with domestic demand experiencing<br />
a dip, cement manufacturers have<br />
been selling off their surplus inventory to<br />
regional markets perhaps with a cut to<br />
their margins.<br />
Pakistan’s cement industry received foreign<br />
exchange revenue of US$27.34m<br />
by exporting 655,317t of cement during<br />
the month of <strong>Jan</strong>uary <strong>2019</strong>, compared to<br />
US$25.89m at 624,714t in the previous<br />
month and US$17.88m from 357,371t<br />
during <strong>Jan</strong>uary, 2018. This shows an increase<br />
of 5.6 per cent and 52.9 per cent<br />
in terms of value on MoM and YoY basis,<br />
respectively, according to the Pakistan<br />
Bureau of Statistics.<br />
In terms of quantity, the exports saw a<br />
growth of 4.9 per cent in <strong>Jan</strong>uary <strong>2019</strong><br />
on MoM and 83.4 per cent over <strong>Jan</strong>uary<br />
2018 YoY basis during this period.<br />
However, on cumulative basis, in the first<br />
seven months of FY18-19, export revenue<br />
rose 35.1 per cent to US$184.34m<br />
with Pakistan exporting 4.32Mt of cement,<br />
compared to US$136.47m from<br />
2.718Mt in 7M2017/18 (July 2017-<strong>Jan</strong>uary<br />
2018). In terms of Pakistani rupees,<br />
the growth stood at 66 per cent.<br />
The breakdown of exports, according<br />
to All Pakistan Cement Manufacturers<br />
Association (APCMA), shows that export<br />
dispatches to Afghanistan and India<br />
continued to decline in the 7MFY18-19.<br />
Exports to Afghanistan fell by 21.7 per<br />
cent to 1.02Mt and volumes to India<br />
were down 4.6 per cent to 648,108t.<br />
However, seaborne exports increased<br />
by over 57.8 per cent to reach 1.201Mt<br />
of cement and 100 per cent 1.264Mt of<br />
clinker during this period.<br />
Export to Afghanistan<br />
According to experts and local media,<br />
it is also unfortunate that markets like<br />
Afghanistan, which took up more than<br />
50 per cent share of Pakistan’s cement<br />
exports, are no longer as welcoming. In<br />
7MFY19 they fell by 22 per cent YoY.<br />
That market is not only being flooded<br />
with more affordable Iranian cement,<br />
other regional players have also been<br />
eyeing it. Some may attribute the frequent<br />
closures at the borders and political<br />
tensions between the two countries<br />
to be a driving factor into Pakistan losing<br />
its market share, but the issue is more an<br />
economic one with other cement entering<br />
the market at a lower price. In addition,<br />
Afghanistan is finally diversifying its<br />
trade relations as well.<br />
Port facility<br />
However, the south is still performing<br />
better than the north in terms of exports.<br />
Southern players enjoy the advantage<br />
of proximity to the port which provides<br />
better export options (in terms of costs)<br />
as compared to cement producers in the<br />
north.<br />
( A <strong>Chronicle</strong> Report)<br />
TRADE CHRONICLE - <strong>Jan</strong> - <strong>Feb</strong> . <strong>2019</strong> - Page 39
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