KARACHI: Cement sales grew 23 per cent to 4.336 million tonnes in August as compared to 3.531m tonnes in August 2020.

According to the data released by the All Pakistan Cement Manufacturers Association (APCMA), local cement dispatches increased to 3.814m tonnes from 2.805m tonnes in August 2020, up by 36 per cent. However, export shipments declined by 28.24pc to 521,468 tonnes from 726,687 tonnes in August 2020.

The North based mills dispatched 3.141m tonnes in the domestic market, an increase of 25.42pc over 2.504m tonnes in August 2020. The South based mills posted robust growth of 124pc in local sales to 673,572 tonnes against 300,750 tonnes in August 2020.

Exports from North based mills declined by 33pc to 141,804 tonnes in August against 212,076 tonnes in August 2020. Similarly, export shipments from South also fell by 26.22pc to 379,664 tonnes in August from 514,611 tonnes in the corresponding month last year.

Total cement despatches -- domestic and export -- in the July-August period were down by 1.61pc to 8.235m tonnes from 8.37m tonnes in the same period last year.

Surging input costs

An APCMA spokesman said that the landed price of coal that was around Rs18,000 per tonne in August 2018 has risen to Rs31,500 per tonne thus increasing the cost of production by approximately Rs90 per bag. Similarly, electricity rate that was Rs11.68 per unit in August 2018 is now Rs19.40 per unit. This has impacted the cost of production by around Rs35 per bag.

Other input costs like packing material, provincial taxes on raw material and fuel prices have also gone up thus pushing the overall cost of production.

Without increasing the capacity of coal handling, the country would have a major risk of energy security as well as availability of key industrial materials such as cement, chemicals etc.

He further emphasised that the current demand of imported coal for cement sector is around 8.120m tonnes, but there is only one terminal in the country to handle entire coal shipments. Due to this, cement industry is continuously facing delays in unloading of coal shipments, resultantly paying demurrages and incurring extra costs on its operations. The situation would further aggravate within the next two years when cement production capacity of the country would soar from 70m tonnes to around 100mn tonnes per annum.

Increase in domestic sales is a good sign for the cement industry which shows that the economic activity is picking which would help the country to achieve higher GDP growth. However, he added that the government planners should take notice of declining exports and should support industry to compete in the international markets.

Published in Dawn, September 4th, 2021