Cement sales peak in September on rising demand

Updated 04 Oct 2020

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Exports during the first quarter of this fiscal year swelled by 35.67pc to 2.735m tonnes from 2.016m tonnes. — File
Exports during the first quarter of this fiscal year swelled by 35.67pc to 2.735m tonnes from 2.016m tonnes. — File

KARACHI: Cement sales — local and exports — during September reached to their highest monthly figure of 5.213 million tonnes as against despatches of 4.273m tonnes in September 2019, latest data showed on Saturday.

The local uptake increased by 17.65 per cent to 4.089m tonnes from 3.475m tonnes in September 2019 while exports went up by 41pc to 1.124m tonnes from 0.797m tonnes in the same month last year.

Domestic cement despatches in the north region surged by 16.30pc to 3.523m tonnes during September from 3.029m tonnes in September 2019. Exports increased by 9.27pc to 0.287m tonnes in September from 0.263m tonnes in September 2019.

In south, domestic despatches stood 27pc higher at 565,236 tonnes from 445,629 tonnes in September 2019. Exports grew by 56.53pc to 837,033 tonnes in September this year from 534,751 tonnes in September 2019.

The 1QFY21 ended on a positive note as total cement despatches grew by 22pc to 13.573m tonnes versus 11.136m tonnes in July-Sept 2019-2020. Domestic despatches registered a healthy growth of 19pc, rising from 9.120m tonnes to 10.837m tonnes. Exports swelled by 35.67pc from 2.016m tonnes to 2.735m tonnes.

All Pakistan Cement Manufacturers Association (Apcma) spokesperson said the country’s cement industry has made large investments in new plant and machinery and modernisation over the last few years to meet market demand.

However, he said that cement is subject to very high taxes including Federal Excise Duty (FED) of Rs1,500 per tonne equivalent to Rs75 per bag. He urged the government to abolish FED on cement sector.

The recent construction package announced by PM Imran Khan has helped the industry in terms of growth and is fully aligned to support the government in its efforts to restart the development and re-industrialisation, he said.

Top Line Securities’ Shankar Talerja said the overall uptick in cement demand is primarily led by the private sector and resumption in real estate activities after announcement of construction sector package. This growth is also conjoined by start of work on different dams.

He expects sales to slow down in October due to high base. However, in latter part of FY21, he said this trend is likely to sustain as more liquidity is likely in the sector as banks look to take construction sector loans to 5pc of their total loan book by December 2021 as per the State Bank of Pakistan’s directions.

An analyst at Sherman Securities attributed growth factor to gradual resumption of global trade which supported dispatches to Bangladesh, Sri Lanka and Afghanistan.

Published in Dawn, October 4th, 2020