KARACHI: After a slowdown in sales in the last few months, local cement despatches recovered by four per cent in March to 4.74 million tonnes from 4.56m tonnes a year ago, signaling some start of construction activities after the winter season, All Pakistan Cement Manufac­turers Association (APCMA) said on Wednesday.

Data shared by the association showed that exports in March fell massively by 64pc to 295,321 tonnes from 815,120 tonnes in March 2021.

As a result, the overall despatches (local sales and exports) in March fell by 6.25pc to 5.04m tonnes from 5.37m tonnes in March 2021.

In March, North-based cement mills sold 3.85m tonnes in the domestic markets, up 1pc from 3.8m tonnes in March 2021. Exports from North-based mills massively declined by 71.26pc from 280,411 tonnes in March 2021 to 80,584 tonnes this year.

South-based mills despatched 897,697 tonnes in the local markets that was 19pc higher compared to the despatches of 754,741 tonnes during March 2021. Exports from the South also plunged by 60pc to 214,737 tonnes in March from 534,709 tonnes during the same month last year.

Despite a rise in domestic uptake in March, the overall July-March 2021-22 (9MFY22) local sales slightly remained low by 0.03pc to 36.17m tonnes from 36.18m tonnes in the same period last fiscal. Exports during the same period came down by a massive 35pc to 4.64m tonnes from 7.14m tonnes during 9MFY22.

As a result, the overall cement despatches (local sales and exports) in 9MFY22 were 40.81m tonnes, down by 5.81pc than 43.33m tonnes during the corresponding period of last fiscal year.

North-based mills despatched 29.93m tonnes domestically during 9MFY22 showing a reduction of 2.27pc than 30.63m tonnes during the same period in FY21. Exports from the North declined by 64.47pc to 679,101 tonnes in 9MFY22 compared to 1.91m tonnes 9MFY21.

Domestic despatches by South-based mills during 9MFY22 were 6.23m tonnes showing an increase of 12.31pc over 5.55m tonnes during the same period of last fiscal year. There was, however, a substantial decline of around 24.31pc in exports from the South zone as the volumes reduced to 3.96m tonnes in the first nine months of current fiscal year from 5.23m tonnes during the corresponding period of last fiscal year.

A spokesman of APCMA said the steep decline in cement exports was hurting not only the cement manufacturers but the government’s revenue collection and foreign exchange as well. There is an immense need to formulate industry friendly policies to catch-up our cement sales in international markets as well as to increase indigenous consumption of the commodity, he added.

Mehroz Khan at Top Line Securities said domestic cement sales had risen in March due to seasonality amid resumption in construction activities post winters.

However, local sales in 9MFY22 were slightly slow because of cuts in public sector development program allocation, rising construction cost and inflationary impact restricting the demand growth, he said.

Mr Khan said exports are slowing down on the back of global supply chain disruptions keeping the sea freight charges on the higher side.

Industry utilisation during March was 83pc with 9MFY22 average utilisation of around 78pc.

He said rising coal and commodity prices remain a key concern for the sector. Due to sharp rise in coal prices, industry has been using more Afghan, local and Russian coal which is usually cheaper by 30-40pc to the international Richard Bay coal prices. In this scenario, players in the North are better placed to avail the Afghan coal due to better availability and lower transportation cost.

He anticipated that industry dispatches are likely to fall in April due to anticipated dull construction activities during Ramazan.

Published in Dawn, April 7th, 2022