KARACHI: Local cement despatches posted a marginal rise of two per cent to 16.688 million tonnes during the first five months of the current fiscal year, a tepid pick up in construction activities.

However, cement exports surged 104pc to 3.129m tonnes in July-November from 1.529m tonnes in the same period last year.

As a result, the cumulative despatches (local and exports) grew 11pc to 19.816m tonnes from 17.883mn tonnes in 5MFY23, data released by All Pakistan Cement Manufacturers Association (APCMA) showed.

In contrast, the cumulative cement sales year-on-year dipped 2.12pc to 3.924m tonnes in November.

Local cement despatches fell by 15.53pc to 3.262m tonnes in November compared to 3.862m tonnes in the same month last year. Export despatches, however, surged five times to 662,374 tonnes from 147,757 tonnes in November 2022.

APCMA spokesperson mentioned that some players implemented the axle load regime from Nov 1 without any consultation with the stakeholders, resulting in a massive rise in freight charges on cement, coal and other raw materials.

He suggested the government should implement axle load in a phased manner over the next two to three years. “We also foresee a major shortage of trucks which will disturb the supply to the markets. Exports will also be affected by this axle load regime,” he added.

Fahad Hussain Khan of Topline Securities said November cement sales remained flat due to a winter-related slowdown in construction activities and the implementation of the axle load regime.

Expecting a slowdown in local sales in the coming months due to the winter season, he said the full-year FY24 cement despatches will grow by 5pc year-on-year to 42m tonnes led by improved farmers’ income, economic stability and expected decline in interest rate.

Similarly, exports are also expected to increase by 45pc to 6.5m tonnes in FY24, taking the total cement despatches (local sales and exports) to 48.5m tonnes, up 9pc in FY24.

According to the SPI data, the price of a 50kg cement bag soared 19pc to Rs1,240 during the week ending on Nov 30 versus Rs1,042 on Dec 1, 2,022.

Published in Dawn, December 3rd, 2023