Lahore: Cement sector posted a growth of 11.18% in December 2020 as compared to December 2019. Total Cement dispatches during December 2020 were 4.788 million tons against 4.306 million tons dispatched during the same month of last fiscal year.
According to the data released by All Pakistan Cement Manufacturers Association, local cement dispatches in the month of December increased to 4.154 million tons compared to 3.536 million tons in December 2019, depicting an increase of 17.47 percent. However, second consecutive drop was witnessed in cement exports. The exports dropped from 769,986 tons in December 2019 to 633,431 tons in December 2020.
In the north region, domestic cement dispatches increased by 17.09% to 3.471 million tons during December 2020 from 2.964 million tons in December 2019. Exports from the north decreased by 40.52% to 0.123 million tons in December 2020 from 0.206 million tons in December 2019.
In the south region, domestic cement dispatches increased by 19.47% to 682,854 tons during December 2020 from 571,558 tons in December 2019. Exports from south decreased by 9.36% to 0.510 million tons in December 2020 from 0.563 million tons in December 2019.
During the first six months of current fiscal year, total cement dispatches of the country grew by 15.66% from 24.751 million tons in July-Dec 2019 to 28.628 million tons in July-Dec 2020.
Local dispatches have increased by 15.89% in July-Dec 2020to 23.610 million tons from 20.373 million tons in July-Dec 2019. Exports also increased from 4.377 million tons in July-Dec 2019 to 5.017 million tons in July-Dec 2020 showing a growth of 14.63%.
Region wise, in the north region, local cement dispatches increased by 16.21% to 20.228 million tons during July to December 2020 from 17.406 million tons in July to December 2019. Exports from the north decreased by 14.74% to 1.210 million tons in July to December 2020 from 1.420 million tons during same period last year.
In the south region, domestic cement dispatches increased by 13.97% to 3.381 million tons during July to December 2020 from 2.966 million tons in July to December 2019. Exports from the south increased by 28.74% to 3.806 million tons in July to December 2020 from 2.957 million tons during corresponding period last year.
The reason for decrease in exports from south for last two months is due to heavy congestion at ports and as per the directives of the government, the priority berthing is given to imports of wheat, sugar and canola vessels.
This is causing a great loss of exports of cement and clinker from Pakistan as customers are diverting their ships to other destinations in the region to load cement and clinker due to heavy congestion at both KPT and PQA.
The cement industry needs level playing field and requests to the government that exports should be given priority so that industry can earn maximum foreign exchange for the country.
A spokesman of All Pakistan Cement Manufacturers Association mentioned that the rising trend of coal, electricity and diesel prices is also hurting the cement sector. During last six months’ coal prices have increased by almost $35 per ton. On the other hand; duty and taxes on cement sector are also very high. Cement is subject to Federal excise duty at Rs1,500 per ton (Rs.75 per bag) and General sales tax at 17% (Rs77 per bag). Total direct taxes on cement per bag are Rs152 per bag.
He requested the government to give tax concessions on cement sector which will reduce the cost of production, giving boost to construction activities and employment in the sector.
Federal Board of Revenue is now in process of implementation Track and Trace System on major sectors such as tobacco, cement, sugar and fertilizer. The APCMA has already requested the government to implement Track & Trace System on cement sector as this would help to promote level playing field and boost revenues for the country by curbing any tax evasion.