KARACHI: The first quarter of FY23 ended on a negative note for the cement sector as overall despatches (local and exports) plunged by 25 per cent to 9.613 million tonnes from 12.825m tonnes in the corresponding period of last fiscal year.

Sunny Kumar of Topline Securities attributed the decline in domestic sales to the overall slowdown in economic activities, higher construction costs, intense rains and floods in August and September and inflationary impact which restricted demand growth. Exports remained depressed owing to the global economic slowdown.

As per data released by the All Pakistan Cement Manufacturers Association (APCMA), domestic despatches during this period were 8.599m tonnes as against 11.279m tonnes in the same period last year, down by 24pc.

Export despatches were also 34.44pc less as the volumes reduced to 1.013mn tonnes during the first three months of the current fiscal year compared to 1.545mn tonnes during the same period of last fiscal year.

North-based mills despatched 7.258mn tonnes domestically during 3MFY23 showing a reduction of 23.46pc from 9.483mn tonnes during July-September 2021-22. Exports from the North declined by 25.53pc to 288,712 tonnes compared with 387,667 tonnes during the same period last fiscal. Total despatches by North-based mills reduced by 23.54pc to 7.547mn tonnes during the first quarter of the current financial year from 9.871mn tonnes during the same period of last financial year.

Domestic despatches by South-based mills during July-September FY23 were 1.341mn tonnes showing a drop of 25.31pc over 1.795mn tonnes during the same period of last fiscal year. Exports from the South declined by 37.43pc to 724,682 tonnes during July-September 2022-23 compared with 1.158mn tonnes during the same period last fiscal.

Total despatches by South-based mills shrank by 30pc to 2.065mn tonnes during the first quarter of the current financial year from 2.953mn tonnes during the same period last fiscal.

In September, the overall despatches (local sales and exports) fell by 6.83pc to 4.276mn tonnes as against 4.589mn tonnes during the same month of last fiscal year.

Local cement despatches by the industry during September 2022 were 3.80mn tonnes as compared to 4.01mn tonnes in September 2021, depicting a decline of 5.33pc. Exports despatches also came down by 17.35pc from 571,613 tonnes in September 2021 to 472,437 tonnes in September.

In September 2022, North-based cement mills despatched 3.26mn tonnes, down by 8.34pc as against 3.56mn tonnes in September 2021. South-based mills despatched 1.01mn tonnes during September 2022 which was 1.58pc less compared to 1.02mn tonnes during September 2021.

North-based cement mills despatched 3.13mn tonnes in domestic markets in September showing a drop of 9pc as against 3.45m tonnes in September 2021. South-based mills despatched 666,595 tonnes in local markets during September 2022 which was 17.47pc higher compared to 567,445 tons during September 2021.

Exports from North-based mills increased by 14.75pc as the quantities increased from 110,245 tonnes in September 2021 to 126,502 tonnes in September 2022. Exports from the South fell by 25pc to 345,935 tonnes in September 2022 from 461,368 tonnes during the same month last year.

A spokesman of APCMA expre­ssed serious concerns over strict limitations on establishing letters of credit by the State Bank for spare parts and other machinery.

The government must relax conditions for opening letters of credit immediately as, without spare parts, cement factories will face difficulties in running their operations.

Published in Dawn, October 8th, 2022