PAKISTAN’S cement industry, supported by abundant indigenous raw material, comprises 26 plants with a collective annual installed capacity of 83.18 million tonnes. However, despite this capacity, actual cement sales across the country witnessed consistent month-on-month decline throughout the 2022-23 fiscal, mainly due to reduced domestic demand.

Furthermore, total cement sales for 2022-23 amounted to 44.58 million tonnes, marking a 15.71 per cent year-on-year decline. This trend has persisted, with only a brief respite in the first nine months of the current fiscal year, up to March 2024, during which total cement sales reached 34.5 million tonnes compared to 33.6 million tonnes in the same period of the preceding year, representing a nominal 2.7pc growth. Besides, total sales saw a 3.8pc decrease in domestic sales during the said period, while exports surged by 68pc, nearly doubling compared to the corresponding period in 2022-23.

With continuing sluggish domestic sales, the industry has shifted focus towards boosting exports and exploring new markets. Despite global challenges, Pakistani cement exports surged from 2.152 million tonnes in 2021-22 to 4.566 million tonnes in 2022-23, maintaining approximately 10pc of the total sales. Pakistan earned $323 million in 2022-23 from cement exports compared to $165.7 million in 2021-22, leveraging the devaluation of the Pakistani rupee against the dollar.

While Japan, Vietnam and China lead globally in cement as well as clinker exports, Pakistan has historically been an inconsistent exporter due to various factors. On the flip side, cement exports represent a nominal share of Pakistan’s total commodity exports, accounting for 0.538pc in 2021-22 and 0.939pc in 2022-23. Major export de­­st­­i- n­ations in 2022-23 included Sri Lanka ($104 million), Afghanistan ($71 million), Bangladesh ($56 million), Madagascar ($36 million), and other countries, such as Qatar, South Africa, Mozambique, Togo, and Cameroon (cumulative exports $56 million).

In the past, Pakistan has exported rather significant volumes of cement, with exports exceeding $570 million in 2012, $530 million in 2013, and $517 million in 2014. However, exports declined to $345 million in 2015 and went down to $270 million in 2021. Gradually, Pakistan lost some markets to cheaper sources of supply from Iran, India and China. Bangladesh revitalised its cement industry, and has recently entered the export market.

It is imperative for the industry to regain momentum in international markets. Recent developments include receiving orders for the first-ever Pakistani cement shipment to the United Kingdom, securing a substantial order from the United States, and exploring markets in Mexico, France and Germany, indicating promising prospects.

Over the last more than a decade, the total installed capacity of the industry has surged from 47 million tonnes in 2010 to the current 83 million tonnes per year. This capacity has to be optimised.

Hussain Ahmad Siddiqui
Islamabad

Published in Dawn, May 9th, 2024

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