Economy planners' cavalier attitude towards the rapidly declining export market has irked the All Pakistan Cement Manufacturers Association (APCMA). Latest despatches statistics of cement covering the first seven months of this fiscal year showed that the domestic consumption of cement has increased in double digits during the past four months while exports have entered the sixth month of heavy decline in double digits calling for serious attention from these policymakers.
"A substantial reduction in the exports has drastically affected foreign exchange earnings of the country and cement makers are finding it difficult to maintain their existence in export markets because of high costs of business in Pakistan and the absence of export incentives," said APCMA spokesman on Thursday.
Cement despatches between July 2015 and January 2016 increased by 6.4 percent to about 21 million tonnes compared to about 20 million tonnes during the corresponding period of the last fiscal year. This positive figure in overall growth is attributed to the robust growth in domestic despatches during this period. The local despatches increased to about 18 million tonnes between July 2015 and January 2016 against 15.5 million tonnes during the same fiscal indicating an increase of 15.6 percent.
"Contrary to this, the exports declined to 3.4 million tonnes between July 2015 and January 2016 against 4.5 million tonnes between July 2014 and January 2015, for instance, by 24.98 percent," he added. Analysing the despatches, factories located in north despatched 14.8 million tonnes in local markets between July 2015 and January 2016 against about 13 million tonnes during the same period of the last fiscal year depicting a growth of 14 percent.
The South-based factories registered even more growth of 23 percent in domestic despatches between July 2015 and January 2016 as their local sales recorded in this period were about 3 million tonnes against 2.5 million tonnes during same period last year.In exports, North-based mills registered a decline of 22.4 percent as exports were restricted to 2.2 million tonnes in the first seven months of this fiscal year against 2.8 million tonnes during July 2014 to January 2015. South-based factories also suffered reduction in exports during first seven months of current fiscal year by 29.2 percent to 1.2 million tonnes from 1.8 million tonnes in corresponding period of last fiscal year.
The industry despatched about 3 million tonnes of cement this year compared with about 3 million tonnes despatched during January 2015 showing a growth of 6.47 percent. Again this was mainly attributed to healthy domestic sales. The local despatches during January 2016 were about 2.7 million tonnes against 2.4 million tonnes during January 2015 showing growth of 11.54 percent. Export despatches during January 2016 dropped to 386,562 tonnes against 478,000 during January 2015 showing decline of 19.19 percent.
He also said that despite many reminders on significant issues which had been depleting export volumes, apparently no interest had been shown by the government to address them. "The government should also impose 20 percent Regulatory duty for import of cement in addition to Customs duty in order to protect local industry. It should also give due attention to reduce energy costs including removal of GIDC imposed on gas, reduction of Customs duty on coal to zero percent and additional incentive of five percent on export of cement by sea in order to reduce the overall cost of operations to make the Pakistani cement industry competitive globally," he said.