The negative growth of cement sales in November was a shock for the sector as majority of the mills are operating at loss with declining despatches in local and export markets.
All Pakistan Cement Manufacturers Association (APCMA) spokesman said that November proved to be the worst month for the cement manufacturers this fiscal as the cement despatches declined by 6.47 per cent as compared with the corresponding period of last year.
The cement despatches’ decline was due to Eidul Azha and less demand in the local as well as export markets.
The local cement demand has continuously declined since July 2011 when the sales of the commodity increased by 16.31 per cent as compared with the production in July 2010.
However, the increase in local demand was reduced to 10.61 per cent in August, 8.81 per cent in September, and 5.77 per cent in October over the despatches made in the corresponding periods of these months last year. “November is the first month this fiscal when demand in the local market declined negatively by 5.12 per cent,” said a spokesman of APCMA.
The spokesman said that the export sector’s performance during the last five months has remained lopsided with exports declining in three months including November and increasing in two. However, he added, the positive trends in the domestic market raised hopes of the manufacturers as domestic sales are almost three times higher than exports.
He said that cement sector despatched 12.72 million tonnes of cement during the first five months of this fiscal as the mills operated at an average capacity of 69.05 per cent – the lowest capacity utilisation since 2002-03. He said that cement exports during July-November 2011 have declined by 3.90 per cent as Pakistan continues to lose exports through sea route.
The spokesman appealed to the government to initiate the badly needed infrastructure projects to boost growth and economic activities by improving governance. He said that it would be unfortunate if the state-of-art cement plants in the country were forced to close as cement is the only commodity outside textiles that has the potential to increase our exports.
He said that certain facilitations announced for this sector including transport subsidy on export of cement have not been honoured that has depressed exports.
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