Cement sales, exports witness double-digit growth

Cement sales and exports saw double-digit growth during the last fiscal year of 2021/22 as robust demand in the domestic market and global offtake continued despite coronavirus uncertainties, industry officials said on Friday.

In FY2021, total cement despatches grew 20 percent to 57.4 million tons from 47.8 million tons in FY 2020, according to All Pakistan Cement Manufacturers Association (APCMA).

Local cement despatches increased 20.4 percent to 48.1 million tons. Exports also increased from 7.8 million tons to 9.3 million tons, showing a growth of 19 percent. APCMA spokesman said the year has been good for cement, as demand has grown considerably because of construction activities.

“Start of construction activities under Naya Pakistan Housing Scheme and good PSDP [public sector development programme] spending helped cement sector witness a record-breaking growth,” said the spokesman.

The industry official said cement industry is expanding its capacity from 70 million tons to around 100 million tons with the hope that the demand will increase by 15 percent annually for the next three years due to increase in allocation under public sector development programme, increase in China-Pakistan Economic Corridor-related projects and overall demand.

“The coal prices are showing significant upward trend as the cost and freight cost during the last fiscal year has increased to $140 per ton from $60 per ton a year earlier,” said the industry’s spokesman. “Electricity tariffs and furnace oil prices have also increased and impacted the overall cost of production which has gone up by around Rs110 per bag compared to same period last year.”

In the north region, local cement despatches increased 18.2 percent to 40.5million tons from 34.3 million tons. Exports from the north increased 30 percent to 2.5 million tons from 1.9 million tons. In the south region, domestic cement despatches increased 34 percent to 7.5 million tons from 5.6 million tons. Exports from the south also increased 14.8 percent to 6.7 million tons from 5.8 million tons.

In June, cement sector posted 12.7 percent year-on-year growth. Total cement despatches were 5.2 million tons as against 4.6 million tons. Local cement sales increased to 4.6 million tons in June this year as against 3.8 million tons a year earlier, up 22 percent year-on-year. Exports dropped 31 percent to 542,622 tons compared to 787,842 tons.

Domestic cement despatches in the north increased by 14 percent year-on-year to 3.8 million tons in June. Exports from the north massively increased by 338 percent to 201,540 tons. In the south region, domestic cement despatches increased 79 percent to 808,490 tons from 450,792 tons. Exports from south decreased 54 percent year-on-year to 341,082 tons in June, according to APCMA data.