Pakistan's cement industry has recorded a YoY fall of 6.83 per cent in dispatches during September 2022, with total cement dispatches (local and exports) shrinking to 4.276Mt from 4.589Mt in the same month of last fiscal year, says data released by the All Pakistan Cement Manufacturers Association (APCMA). The breakdown shows that local dispatches slid by 5.33 per cent to 3.80Mt from 4.01m, while exports declined by 17.35 per cent to 472,437t from 571,613t.
Giving reasons for the negative trend, a spokesman from APCMA expressed serious concerns over strict limitations on establishing a letter of credit by the State Bank for spare parts and other machinery. The government must relax conditions for opening a letter of credit immediately as, without spare parts, cement factories will face difficulties in running their operations. At the same time, experts 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.
North and south zone dispatches
In September 2022, the north-based cement mills dispatched 3.26Mt of cement, down 8.34 per cent against 3.56Mt in September 2021. Southern-based mills dispatched 1.01Mt of cement during September 2022, down 1.58 per cent on dispatches of 1.02Mt during September 2021.
The breakdown shows that northern cement mills dispatched 3.13Mt cement in domestic markets in September 2022, down 9.08 per cent against 3.45Mt in September 2021. South-based mills dispatched 666,595t of cement in local markets during September 2022, which was 17.47 per cent higher than the dispatches of 567,445t during September 2021.
Exports from north-based mills increased by 14.75 per cent as the quantities improved from 110,245t in September 2021 to 126,502t in September 2022. Exports from the south reduced by 25.02 per cent to 345,935t in September 2022 from 461,368t during the same month last year.
Cumulative dispatches in 3MFY22
During the first three months (July – September) of the current fiscal year FY22, total cement dispatches (domestic and exports) were 9.613Mt, 25.04 per cent lower than the 12.825Mt dispatched during the corresponding period of the last fiscal year. Out of this figure, domestic dispatches were 8.599Mt in 3MFY22 against 11.279Mt during the previous year, showing a reduction of 23.76 per cent. Export dispatches were also 34.44 per cent less as the volumes reduced to 1.013Mt during 3MFY22 compared to 1.545Mt exports during 3MFY21.
Northern mills dispatched 7.258Mt cement domestically in 3MFY22, showing a reduction of 23.46 per cent compared to 9.483Mt during July-September 2021. Exports from the north declined by 25.53 per cent to 288,712t compared with 387,667t exported during the same period last year. Hence, total dispatches by northern mills reduced by 23.54 per cent to 7.547Mt during the first quarter of the current financial year from 9.871Mt in the previous financial year.
Domestic dispatches by southern mills during 3MFY22 were 1.341Mt, showing a reduction of 25.31 per cent compared to the 1.795Mt cement dispatched during 3MFY21. Exports from the south declined by 37.43 per cent to 724,682t during 3MFY22 compared with 1.158Mt exported during the previous year. Total dispatches by south-based mills were reduced by 30.06 per cent to 2.065Mt during the first quarter of the current financial year from 2.953Mt during the same period of the last financial year.
