Cement exports: Manufacturers, revenue collection, FX reserves affected badly by decline

LAHORE: Steep decline in cement exports is hurting not only the cement manufacturers but also the government’s revenue collection and foreign exchange. There is an immense need to formulate industry-friendly policies to catch-up our cement sales in international markets and increase indigenous consumption of the commodity.

This demand was raised by the All Pakistan Cement Manufacturers Association (APCMA) while sharing the monthly data of cement despatch production and sale for the month of March 2022 on Wednesday. The data shows that exports despatches suffered massive decline by 63.77 percent as the volumes reduced from 815,120 tons in March 2021 to 295,321 tons in March 2022.

Overall cement despatches declined by 6.25 percent in March 2022. Total cement dispatched during March 2022 were 5.04 million tons against 5.37 million tons despatched during the same month of last fiscal year.

The data further showed that the local cement despatches by the industry during March 2022 were 4.74 million tons as compared to 4.56 million tons in March 2021, showing an increase of 4.02 percent.

In March 2022, North based cement mills despatched 3.85 million tons cement in domestic markets showing an increase of 1.07 percent against 3.8 million tons despatches in March 2021. South based mills despatched 897,697 tons cement in local markets during March 2022 that was 18.94 percent higher compared to the despatches of 754,741 tons during March 2021.

Dec cement despatches decline 4.2pc to 4.59m tons YoY

Exports from North based mills massively declined by 71.26 percent as the quantities reduced from 280,411 tons in March 2021 to 80,584 tons in March 2022. Exports from South also reduced by 59.84 percent to 214,737 tons in March 2022 from 534,709 tons during the same month last year. During the first nine months of current fiscal year, total cement despatches (domestic and exports) were 40.81 million tons that calculate to 5.81 percent lower than 43.33 million tons despatched during the corresponding period of last fiscal year.

Further analysis indicated that domestic uptake of the commodity reduced by 0.03 percent to 36.17 million tons from 36.18 million tons during July-March 2021 whereas exports during the same period declined by a massive 35.04 percent to 4.64 million tons from 7.14 million tons during July-March 2021.

North based mills despatched 29.93 million tons cement domestically during the first nine months of current fiscal year showing a reduction of 2.27 percent than cement despatches of 30.63 million tons during July-March 2021. Exports from North based mills declined by 64.47 percent to 679,101 tons during July-March 2022 compared with 1.91 million tons exported during the same period last year.

Domestic despatches by South based mills during July-March 2022 were 6.23 million tons showing an increase of 12.31 percent over 5.55 million tons cement despatched during the same period of last fiscal year. There was however substantial decline of around 24.31 percent in exports from south zone as the volumes reduced to 3.96 million tons in the first nine months of current fiscal year from 5.23 million tons during corresponding period of last fiscal year.

Copyright Business Recorder, 2022