9MFY18-19 APCMA data depicts gloomy results in northern Pakistan
Pakistan's cement industry showed poor performance during the first nine months of current financial year July 2018-March 2019. All Pakistan Cement Manufacturers Association (APCMA) pictured a gloomy situation in its monthly report, stating that cement sector with its huge underused capacities continued to face a lack of domestic demand due to slowing growth, lower development spending and delays in the launch of the government’s ambitious low-cost housing scheme.
While cement consumption is usually at its height in March as construction activities peak with the pleasant weather and urgency in completing government development works within the financial year, total dispatches (local and exports) in March 2019 declined by 6.7 per cent to 4.34Mt from 4.652Mt in March 2018.
The decline in domestic consumption continued as it went down to 3.858Mt in March 2019 from 4.26Mt in March 2018, depicting a decrease of 9.4 per cent. Though exports continued to increase, the growth posted in March 2019 (23.1 per cent) is the lowest export growth in the last six months.
Northern region
Domestic consumption in the northern part of the country continued to decline as it was only 3.071Mt last month when compared with 3.543Mt in the year-ago period. Exports from northern mills also declined to 0.131Mt in March 2019 from 0.218Mt in March 2018.
Southern region
Domestic dispatches from mills in the southern part of the country edged up to 0.787Mt in March 2019 as compared to 0.717Mt in March 2018. Furthermore, exports from the region doubled from 0.173Mt in March 2018 to 0.35Mt in March 2019.
Cumulative dispatches
When compared with the year-ago period, total local dispatches in first nine months of this financial year fell to 29.448Mt from 31.314Mt, whereas exports rose to 5.132Mt in FY18-19 from 3.444Mt.
According to the APCMA, of particular concern is the continued slump in the northern region where local dispatches have declined by over 10 per cent in last nine months from 25.887Mt in FY17-18 to 23.199Mt in the corresponding period of FY18-19.
However, local dispatches from the mills situated in southern region of the country have increased in 9MFY18-19 by 15.16 per cent to 6.248Mt from 5.426Mt in July 2017-March 2018. Exports also rose in the south by 210 per cent in the 9MFY18-19, from 1.013Mt in July 2017-March 2018 to 3.143Mt in 9MFY18-19, while in the north the exports stood at 1.988Mt in first nine months of this fiscal as compared to 2.431Mt during same period last year, a decline of 18.2 per cent.
"The cement industry has been under pressure this fiscal as development expenditure has been slashed by 40 per cent from last year, however, we were pinning hopes on announcement of programme to build five million low cost houses in next five years for the homeless but that project is yet to start", said the spokesman of APCMA, adding that government should start the project as soon as possible as this is the only chance to gear up production for the industry in current scenario.
