July-December cement despatches jump 16pc

Published January 5, 2021
The government has extended fixed tax regime for the construction sector till December 2021.—File photo
The government has extended fixed tax regime for the construction sector till December 2021.—File photo

KARACHI: Cement despatches during the first six months of the current fiscal year increased by 16 per cent to 28.628 million tonnes compared to 24.751m tonnes during the same period last year, latest data released by the All Pakistan Cement Manufacturers Association (APCMA) showed on Monday.

In December, cement sales grew by 11.18pc to 4.788m tonnes from 4.306m tonnes in December 2019.

During July-December, local cement despatches in the north region grew 16.21pc to 20.228m tonnes as compared to 17.406m tonnes in the corresponding period last year.

Exports from the north fell by 15pc to 1.210m tonnes in the last six months of the current fiscal year from 1.420m tonnes during the same period last fiscal year.

In the southern region, domestic cement despatches grew by 14pc to 3.381m tonnes during July-Dec from 2.966m tonnes in the same period last fiscal. Exports swelled by 29pc to 3.806m tonnes from 2.957m tonnes during 6MFY20.

The reason for decrease in exports from south for the last two months is due to heavy congestion at ports and as per the directives of the government, the priority berthing is given to imports of wheat, sugar and canola vessels, the APCMA spokesman said.

This is causing a great loss of exports of cement and clinker from the country as customers are diverting their ships to other destinations in the region to load cement and clinker due to heavy congestion at both ports in Karachi, he added.

He said the cement industry needs a level-playing field and requested the government that exports be prioritized so that industry can earn maximum foreign exchange for the country.

Meanwhile, during December, local cement despatches increased to 4.154m tonnes as compared to 3.536m tonnes in December 2019, depicting a jump of 17.47pc.

However, exports during month dropped to 633,431 tonnes compared to 769,986 tonnes in December 2019.

In the north region, domestic cement despatches stood 17.09pc higher at 3.471m tonnes during December from 2.964m tonnes in December 2019. Exports from the north plunged by 40.52pc to 0.123m tonnes in December from 0.206m tonnes in December 2019.

In the south region, domestic cement despatches rose by 19.47pc to 682,854 tonnes during December from 571,558 tonnes in December 2019. Exports from the southern region came down by 9.36pc to 0.510m tonnes in December from 0.563m tonnes in December 2019.

APCMA spokesman said that the rising trend of coal, electricity and diesel prices is also hurting the cement sector. During the last six months, coal prices have increased by almost $35 per tonne.

On the other hand, duty and taxes on the cement sector are also very high. Cement is subject to Federal Excise Duty at Rs1,500 per tonne (Rs75 per bag) and 17pc general sales tax (Rs77 per bag).

Total direct taxes on cement per bag are Rs152 per bag.

He urged the government to give tax concessions on the cement sector which would reduce the cost of production, giving a boost to construction activities and employment in the sector.

The Federal Board of Revenue is now in the process of implementing a Track and Trace System on major sectors such as tobacco, cement, sugar and fertilizer.

The association has already requested the government to implement the system on cement sector as this would help to promote level-playing field and boost revenues for the country by curbing any tax evasion, APCMA spokesman said.

Published in Dawn, January 5th, 2021

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