Cement exports and production fall during 5MFY23 and 4MFY23
Pakistan's cement industry export revenue in the first five months of FY22-23 (July-November 2022) drastically fell on account of value and volumes, leading to reduced export earnings on YoY and MoM basis, according to the country’s Federal Bureau of Statistics (FBS). The production also contracted during the first four months of the current financial year.
During the 5MFY22-23, the cement industry earned US$76.87m by exporting 1.547Mt of cement and clinker, compared with US$115.99m from 3.219Mt exports in the 5MFY21-22. As a result, exports dwindled by 33.7 per cent in terms of value, and volumes were down by 51.9 per cent.
In local currency terms, export sales receded by 12.1 per cent YoY to PKR17.26bn (US$76.6m), FBS added.
AHL Research stated that the exports were witnessing a dip as export prices were not attractive and did not cover operating costs. AKD Research, in contrast, adds that the high coal prices, PKR depreciation, and rising fuel costs have kept the cement sector under pressure.
In November 2022 alone, export revenues dropped to US$10.60m on shipments of 223,109t versus US$19.91m on 382,581t in October 2022. This translates to an MoM decline of 46.7 and 41.7 per cent in value and volume terms, respectively. YoY exports decreased by 79 per cent in terms of value and by 84.2 per cent in terms of quantity when considering November 2021’s export figures of US$50.54m on shipments of 1.414Mt.
Production in 4MFY22-23
The overall output of the Large Scale Manufacturing Industries Index (LSMI) decreased by 2.89 per cent in July-October 2022-23 compared to last year. Experts believe the looming effect of floods persists on demands and the high cost of doing business for slowing down the LSMI. The impact was also reflected in local cement production in 4MFY22-23, which slid by 17.6 per cent YoY to 13.138Mt from 15.951Mt. The negative trend was also noticed in October 2022, when production dipped by 10.5 per cent to 4.013Mt versus 4.483Mt in the same month last year.
