Capacity Utilisation of The Cement Industry Declined to 68.29 % in The First Two Months

Capacity utilisation of the cement industry declined to 68.29 percent in the first two months of this fiscal year 2012-13, the lowest level seen in a decade as the demand of cement drastically decreased locally and for export purposes. The decline of cement demand during July and August is mainly due to Ramazan and heavy rains in the country. According to the data released by All Pakistan Cement Manufacturers Association (APCMA), the total cement despatches that declined by 1.64 percent in July this year posted a decline of 2.82 percent in August. The declining consumption of cement is a matter of serious concern for the industry, said a spokesman of the APCMA. He said the cement industry invested heavily in enhancing its capacities in last decade basically to cater to the expected increase in local consumption. He said cement capacity increased from 16.321 million tonnes in 2002-03 to over 44.80 million tonnes in 2012-13. The local consumption of cement however remained almost stagnant in past five years fluctuating in the range of 22-23 million tonnes. He said the economic recession kept the construction sector growth very low. However, he added the exports did provide the cement manufacturers a relief at the start of this century when the cement exports jumped from zero in 2001-02 to 10.981 million tonnes in 2008-09. The exports have been on decline since then reducing to only 8.568 million tonnes in FY 2011-12. The decline, he added continues in this fiscal as the exports during the first two months of this fiscal declined further by 5.87 percent from 1, 545, 879 tonnes in July-August 2011 to 1, 455, 061 tonnes in July-August 2012. He said exports to India have decreased by a whopping 38 percent in the first two months of this financial year to a mere 75, 784 tonnes. Exports to India in fact have been on a constant decline ever since the two countries opened their borders for liberal bilateral trade.  decline is not due to lack of cement demand in India but because of very stringent non-tariff barriers erected by our neighbour, he said and added that Pakistancement is preferred by the Indians because of better quality. He said that India has not yet removed the trade barriers it promised to Pakistani planners on numerous occasions. The export of cement to India is allowed through trucks and rail but the industry is unable to export as much as the quantity due to trade barriers - labour shortages at Indian side of Wagah border and non-availability of railways wagons. Other barriers like delay in registration of cement plants for granting export licence still exist, he added. He said exports to Afghanistan are also on a decline due to slowing down of its economy. The cement exports to Afghanistan, he added declined by almost 5.0 percent during the first two months of this fiscal. Cement industry despatched 5.096 million tonnes of cement in the first two months of this fiscal against despatches of 5.209 million tonnes during the corresponding period of last fiscal. Local consumption declined from 3.664 million tonnes in July-August 2011-12 to 3.641 million tonnes in the same months of this fiscal, registering a decline of 0.61 percent. Exports declined from 1.546 million tonnes to 1, 455 million tonnes, depicting a decrease of 5.87 percent. Source: uaecement