Sales of cement up 21 percent in last 11 months

KARACHI: Cement sector showed excellent growth of around 21 percent during the first 11 months (July-May) of the current fiscal year 2020-21, as total cement dispatches during the month remained 52.222 million tonnes against 43.189 million tonnes during the corresponding period of last fiscal year.
Likewise, growth remained around 50 percent on a year-on-year (YoY) basis in May 2021, as total cement dispatches during the month remained 3.947 million tonnes as compared to 2.634 million tonnes during the same month in the previous fiscal year.
According to data released by All Pakistan Cement Manufacturers Association (APCMA), the cement sector showed excellent growth of 49.86 percent in May 2021. Domestic cement dispatches during May increased to 3.201 million tonnes from 2.271 million tonnes in the same month in FY20. Exports massively rose by 105.56 percent – from 363,174 tonnes in May 2020 to 746,550 tonnes last month.
During May, North-based cement mills dispatched 2.713 million tonnes in the local markets, up by 35.55 percent from 2.001 million tonnes in the same period last year. Exports from North-based mills were just 7,520 tonnes in May 2020 which surged to 203,625 tonnes last month.
Meanwhile, South-based mills sold 487,311 tonnes in domestic markets during May, registering a robust jump of 81 percent compared to 269,003 tonnes in the same period last year. Exports from South also posted a growth of 53 percent to 542,925 tonnes in May 2021 from 355,654 tonnes during the same month last year.
During July-May 2020-21 (11MFY21), total cement dispatches grew by 21 percent to 52.222 million tonnes against 43.189 million tonnes during the corresponding period of last fiscal year.
Local dispatches rose by 20.26 percent to 43.451 million tonnes in 11MFY21 from 36.13 million tonnes in the same period last fiscal year. Exports increased from 7.059 million tonnes during 11MFY20 to 8.771 million tonnes during the same period on FY21, showing 24.25 percent growth.
North-based mills dispatched 36.722 million tonnes during 11MFY21 for domestic consumption that was 18.67 percent higher compared to the same period last fiscal year that stood at 30.943 million tonnes. Exports from North were 2.365 million tonnes, showing a rise of 23 percent over exports of 1.924 million tonnes during the same period of last fiscal year.
Local dispatches from South-based mills were 6.729 million tonnes in 11MFY21 – up 30 perccent from 5.187 million tonnes during the corresponding period of FY20. Exports from South recorded a 25pc jump to 6.406 million tonnes in 11MFY21 compared to 5.135 million tonnes during the same period last fiscal year.
The APCMA spokesman said coal prices are showing a significant upward trend as the C&F cost has increased from around $60 per tonne to around $120 per tonne during FY21. This has increased the cost of doing business as presently coal and pet coke are being used as fuel/raw material for various manufacturing concerns, he added.
The cement industry is subject to federal excise duty of Rs1,500 per tonne and general sales tax (GST) of 17pc of maximum retail price and these taxes are calculated to around Rs170 per bag. Besides FED, the industry also pays Customs duty and taxes on machinery, spare parts imports and on import of coal and pet coke, he said.
The spokesman urged the government to abolish the FED and reduce other duties and taxes in order to provide opportunity to the manufacturers to control their cost of production and further optimise/expand their plant that would in turn help generate more employment and revenues for the government. – TLTP