LAHORE: The impact of the construction package announced by the government is yet to be seen as the domestic cement uptake declined by a massive 37.63 percent to 2.27 million tons in May 2020 from 3.64 million tons in May 2019, the third double digit monthly decline this fiscal.
Moreover, exports also decreased by 24.81 percent from 0.483 million tons in May 2019 to 0.363 million tons in May 2020.
According to the data released by All Pakistan Cement Manufacturers Association (APCMA), cement despatches were only 2.63 million tons in May 2020 for both export and local consumption against the despatches of 4.12 million tons during the corresponding month of last fiscal, which shows a decrease of 36.12 percent. The decline in cement despatches is mainly due to Holy month of Ramazan, Covid-19 and Eid holidays which slows the construction activity.
The domestic cement consumption in the North was 2.001 million tons against 3.05 million tons in May 2019. The consumption in the Southern zone of the country declined to 0.269 million tons from 0.589 million tons in May 2019. In the same way the exports from the North declined to 7,520 tons this May compared with 0.164 million tons last May. From the South, which is the hub of cement exports, there was a nominal increase from 0.319 million tons in May 2019 to 0.356 million tons in May 2020.
During the first eleven months of this fiscal the total cement despatches were 43.189 million tons against 43.327 million tons during the same period last fiscal posting a decline of 0.32 percent. The domestic consumption during the first eleven months of this fiscal declined by 2.72 percent, Cement despatches declined to 36.13 million tons in current fiscal from 37.14 million tons in corresponding period.
While exports increased by 14.07 percent, export despatches increased to 7.059 million tons during the eleven months of current fiscal from 6.188 million tons in the corresponding period last year.
Domestic despatches by the North based mills stood at 30.94 million tons during July-My 2019-20 against 29.61 million tons during the same period last year, posting a less than anticipated growth of 4.49 percent. However, exports from the region during the period under review declined by 19.24 percent, dropping from 2.38 million tons to just 1.924 million tons.
The South based mills despatched 5.18 million tons cement locally during the first 11 months of this fiscal, declining by 31.09 percent from 7.53 million tons during the same period last year. Exports, however, registered a healthy increase of 34.92 percent, going up from 3.81 million tons to 5.13 million tons during the period under review.
"The cement sector has been in dire state for the last few months. It posted a growth of 31 percent in domestic cement consumption in February this year and after that the decline has been consistent, being 16.69 percent in March, 18.97 percent April and now almost double in May," said the spokesperson of APCMA while commenting on the situation.
"The progress on the export front has also been gloomy as it posted a growth of over 48 percent in February; which declined to 5.67 percent in March; posted a massive decline of 56.60 percent in April and 24.81 percent in May," he added.
"The negative growth is due to Covid-19 impact and the delay in implementing public sector development projects," claimed the spokesperson.
"The government should realize that the construction sector is the largest provider of employment to the unskilled workforce in Pakistan and decline in cement consumption means low construction activities and substantial increase in unemployment in the country," he concluded.
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