LAHORE, April 5: The cement sales grew by only 11.93 per cent during the third quarter of the current fiscal year compared to the previous quarter. “Demand growth in cement consumption sharply contracted in the third quarter of the current fiscal year ended March 31, 2005, owing to wide spread rains across the country, severe snowfall in the Northern Areas, and slowing down of development activities in Afghanistan due to winter,” the All Pakistan Cement Manufacturers Association (APCMA) chairman Tariq Saigol said on Tuesday.
In the first half of the current financial year, cement demand showed growth of 24.14 per cent over the previous year, he said. However, during January-March 2005, dispatches of cement in the domestic market amounted to 3,605,245 tons while exports were recorded at 308,269 tons. “In total, the demand grew by only 11.93 per cent over the previous quarter,” he said.
“Nevertheless, the total dispatches of cement during the first nine months of the year amounted to 10,640,108 metric tons for the domestic market and 1,085,621 tons for export, showing a growth of 19.78 per cent over the corresponding period last year. Growth of almost 20 per despite difficult conditions in the third quarter demonstrates a healthy trend in both the private and public sectors. Over all, the capacity utilization was recorded at 87.30 per cent compared to 77.47 per cent for the corresponding period last year,” Mr Saigol said.
He said the fourth quarter of the year is expected to be a high growth period as the unseasonal rains have now ended and construction activities are in full swing. “It can reasonably be expected that the industry will operate at a record capacity utilization level during this quarter.”
The APCMA chairman said severe inflationary pressures as a result of price hike in the cost of coal, natural gas, furnace
oil, transportation charges
and sharp upward movement
in the interest rates has meant that although capacity utilization has been good, profitability of various cement units has been somewhat adversely affected.
“Work is in full swing at several sites where new cement units or expansion is taking place and the first of the new plants is expected to come into production at the end of 2005. Lastly, it should be borne in mind that inclusive of excise duty and sales tax, the industry still bears a charge of over Rs60 per bag in the shape of indirect taxes. It is earnestly hoped that to keep the construction costs at a reasonable level, the cement industry’s long standing demand for abolition of excise duty will be accepted in the budget for the next fiscal year,” Mr Saigol said.
