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Cement exports up by 112 percent: local and regional factors behind robust growth

05 July, 2007

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KARACHI: Country's cement exports have witnessed a strong and healthy growth of 112 percent to an all-time high level of 3.188 million tonnes during the 2006-07 fiscal in the wake of rising international demand and a high increase in local utilisation, industry sources said.

"Regional cement shortages played a key role in achieving the landmark cement export milestone during the last fiscal year, while enhanced production of the local cement factories is another prominent reason behind this huge increase of 112 percent in exports," they added.

They said that during the last fiscal year, strong external demands from the Gulf countries had witnessed pushed the companies to utilise their maximum capacity to meet international demand. Statistics made available from All Pakistan Cement Manufacturers Association (APCMA) shows that cement export registered a robust increase of 1,683,265 tonne during the last fiscal (July-June) and it has touched a new mark of 3,188,424 tonnes against 15,050,159- tonne exports of the same period of the 2005-06 fiscal.

Over all cement dispatches have also been increased by 31.56 percent to all time high level of 2,422,2702 tonnes during the last fiscal year as compared to 18,412,297 tonnes during the 2005-06 fiscal year, depicting a raise of 5,810,405-tonne tons during July-April of current fiscal.

To meet the international and local demand, cement companies' have used maximum capacity utilisation during the 2006-07 fiscal year, which stood at 80 percent, said the sources. Over all cement dispatches also witnessed an increase of 19 percent during June 2007, reaching 2,225,630-tonne mark as compared to 1,867,244 tonnes in June 2006.

During the last month, cement export stood at 392,372 tonnes as compared to 144,544 tonnes during June 2006, denoting an upsurge of 171 percent during June 2007. Local dispatches have gone up by six percent to 1,833,258 tonnes during June 2007 as against 1,722,700 tonnes during the same period of last fiscal.

Cement industry's installed capacity has more than doubled during the last five years, which helped the industry touch all time high dispatches mark during the last fiscal year, industry sources said.

Low prices trend has witnessed in the domestic market, as the cement prices stood at Rs 280-300 per 50-kilogram bag during last July in the domestic market, while presently a 50-kilogram bag is available at Rs 210-225 in the southern region (Sindh and Balochistan) and Rs 180-210 per bag in the northern region.

Huge supply of cement against the low demand has decreased the prices in the local market and due to high competition, cement companies are decreasing their prices to capture the market, they said.

They said that the raise in the export had emerged after the government decisions regarding restoration of the duty drawback on cement exports, in which Central Board of Revenue (CBR) has allowed duty drawback at the rate of Rs 25.08 per tonne on export of cement through a notification. The duty drawback facility is effective since September 27, 2006.

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