LAHORE: The cement sector posted a growth of 22.77 percent in August 2021 as total cement despatches during the said month were recorded at 4.336 million tons against 3.531 million tons during the same month of last fiscal year.
According to the data released by All Pakistan Cement Manufacturers Association (APCMA), local cement despatches during the month of August 2021 increased to 3.814 million tons from 2.805 million tons in August 2020, showing a healthy increase of 35.98 percent. Exports despatches however continued to decline as the volumes reduced from 726,687 tons in August 2020 to 521,468 tons in August 2021, decreasing by 28.24 percent.
During August 2021, North-based cement mills despatched 3.141 million tons cement in domestic markets showing an increase of 25.42 percent over 2.504 million tons despatches in August 2020. South-based mills despatched 673,572 tons cement in local markets during August 2020, registering a robust increase of almost 124% compared to the despatches of 300,750 tons in August 2020.
Exports from North-based mills showed decline by 33.14% as the quantities reduced from 212,076 tons in August 2020 to 141,804 tons in August 2021. Exports from South also decreased by 26.22 percent to 379,664 tons in August from 514,611 tons during the same month last year.
Cement sector posts nominal growth; export declines
During the first two months of current fiscal year, total cement despatches (domestic and exports) were 8.235 million tons that is 1.61 percent lower than 8.37 million tons despatched during the corresponding period of last fiscal year. North-based Mills despatched 6.033 million tons cement domestically during the first two months of current fiscal year showing a slight increase of 1.57 percent than cement despatches of 5.939 million tons during July-August 2020. Exports from North declined by 17.16 percent to 277,422 tons during July-August 2021 compared with 334,899 tons exported during the same period last year.
Domestic despatches by South-based Mills during July-August 2021 were 1.228 million tons showing healthy increase of 50.01 percent over 818,600 tons despatched during the same period of last fiscal year. There was, however, massive decline of around 45 percent in exports from south zone as the volumes reduced to 696,823 tons in the first two months of current fiscal year from over 1.277 million tons during corresponding period of last fiscal year.
Regarding the upward journey of cement prices, APCMA spokesman said landed price of coal that was around Rs 18,000 per ton in August 2018 has increased multiple times since then and current landed cost comes to around Rs 31,500 per ton, increasing the cost of production by approximately Rs 90 per bag. Similarly electricity rate was Rs 11.68 per unit in August 2018 is now Rs 19.40 per unit. This has impacted the cost of production by around Rs 35 per bag. Other input costs like packing material, provincial taxes on raw material and fuel prices have also gone up which has increased the overall cost of production.
He further emphasised that the current demand of imported coal for cement sector is around 8.120 million tons but there is only one terminal in the country to handle entire coal shipments. Due to this, cement industry is continuously facing delays in unloading of coal shipments, resultantly paying demurrages and incurring extra costs on its operations.
Copyright Business Recorder, 2021
Comments
Comments are closed.