The cement sector recorded robust growth of 49.86% in May 2021 as total sales reached 3.947 million tons against 2.634 million tons in the same month of the previous fiscal year.
According to data released by the All Pakistan Cement Manufacturers Association (APCMA), local cement offtake in May 2021 rose to 3.2 million tons against 2.27 million tons in May 2020, showing a healthy growth of 40.95%.
Following a similar trend, exports significantly increased by 105.56%, up from 363,174 tons in May 2020 to 746,550 tons in May 2021.
Cement mills based in northern Pakistan sold 2.71 million tons of cement in domestic markets, an increase of 35.55% over two million tons sold in May 2020. Similarly, the mills based in the south recorded 81.15% growth in sales as they shipped 487,311 tons to the local market in May 2021. These mills had dispatched 269,003 tons in May 2020.
Due to Covid-driven issues, mills in the northern part of the country exported only 7,520 tons in May 2020, however, exports from north-based mills increased to 203,625 tons in May 2021.
Exports from south-based mills soared 52.66% to 542,925 tons in May 2021 compared to shipments of 355,654 tons in the same month of last year.
In the first 11 months (July-May) of the outgoing fiscal year, total cement sales (domestic and exports) stood at 52.22 million tons, which were 20.91% higher than 43.189 million tons of cement sold in the corresponding period of the previous year.
During the 11-month period, local offtake increased 20.26%, going up to 43.451 million tons in July-May FY21 from 36.13 million tons in July-May FY20. Exports rose from 7.06 million tons in the first 11 months of the previous fiscal to 8.771 million tons in July-May FY21, showing a growth of 24.25%.
During the 11 months under review, the mills based in the northern region shipped 36.72 million tons of cement to the local market, up 18.67% from 30.94 million tons in the same period of last year.
Exports from the northern region clocked in at 2.36 million tons, up 22.89% over 1.924 million tons during the same period of last fiscal year.
Local sales from south-based mills rose 29.73% to 6.73 million tons in the first 11 months of the current fiscal year. Mills in the southern region had sold 5.19 million tons in the corresponding period of the previous fiscal year.
Exports of cement from southern Pakistan were recorded at 6.406 million tons, an increase of 24.76% over 5.13 million tons in the same period last year.
An APCMA spokesman said that the cement industry is among the highest contributors to the national exchequer as its contribution has increased to Rs143 billion in 2019-20.
“Cement industry is subject to FED of Rs1,500 per ton and GST of 17% of the maximum retail price and these taxes calculate to around Rs170 per bag,” he said, adding that besides FED, the industry also pays customs duty and taxes on machinery, spare part imports and on import of coal and pet coke.
The spokesperson urged the government to abolish the FED and reduce other duties and taxes to provide an opportunity to the manufacturers to control their cost of production and further optimise/ expand their plant that will in turn help generate more employment and revenues for the government.
Published in The Express Tribune, June 6th, 2021.
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