Tag Archives: All Pakistan Cement Manufacturers Association

Cement despatches increased by a mere of 3.55 percent in September 2016

Karachi, October 07, 2016 (PPI-OT): Slack demand in domestic markets limited growth in cement despatches to a mere 3.55 percent for the month of September 2016. On the other hand, cement exports registered double digit growth during the same period. The reason for slowdown in domestic growth is mainly due to holidays for Eid-ul-Azha. It was the first time in more than 15 months that growth in exports exceeded growth in domestic consumption.

Spokesman for APCMA said that domestic despatches in September 2016 were 2.536 million tons registering a growth of 2 percent while the exports amounted to 0.523 million tons reflecting growth of 11.79 percent, compared to September 2015. Total cement despatches in September amounted to 3.059 million tons depicting a growth of 3.55 percent.

During the month of September 2016, exports to Afghanistan increased nominally from 0.223 million tons in September 2015 to 0.228 million tons in September 2016 showing a growth of 2 percent. However, exports to India registered healthy increase from 0.055 million tons in September last year to 0.112 million tons during the same month this year, showing growth of 101 percent. Exports to India are mainly through Wahga border and southern coast of India.

However, according to data released by All Pakistan Cement Manufacturers Association, during the first quarter of current fiscal year, the cement industry has posted a growth of 9.50 percent in local despatches compared with local despatches during first quarter of last fiscal year. Exports also recorded a growth of 3.03 percent compared with exports during the first quarter of last year. The overall situation during first quarter of current fiscal year showed an 8.33 percent growth compared to the same period of last fiscal year.

During first quarter i.e. July-September 2016 the cement industry despatched 8.976 million tons of cement, while during the corresponding period of July-September 2015 the total despatches were 8.286 million tons. Capacity utilization during the first quarter of this fiscal is 79%, an increase of 7% compared with corresponding period last year.

Industry hopes that the slow growth in domestic consumption is a one off phenomenon, triggered by the new property valuation policy of the government. They expect the domestic consumption to pick up once the valuation issue is settled or factored in by the investors. The growth in demand on infrastructure projects continued unabated, however, the government should avoid disruptive policies that impact construction growth in the country.

The association urged the government to take further measures to encourage domestic construction sector which is the main source of employment to the non-skilled workforce of the country.

For more information, contact:
All Pakistan Cement Manufacturers Association
Secretary General
secretary@apcma.com
House No. 27-28/3A FCC, Gulberg-IV, Lahore.
Tel: 042-5871632 – 33
Fax: 042-5874442
Emil: apcma@apcma.com

Cement industry has recorded its highest ever despatches of 3.584 million tons during March 2016

Karachi, April 05, 2016 (PPI-OT):Cement industry has recorded its highest ever despatches of 3.584 million tons during March 2016 on the strength of healthy growth in domestic consumption and turnaround in exports; enabling it to utilize more than 90 percent of installed capacity during the month. While buoyancy in the domestic market has remained the main feature of cement growth, the turnaround in exports is an icing on the cake.

Cement despatches to domestic markets during the month of March 16 increased by 19.13% to 3.05 Million Tons compared with 2.56 Million Tons during same month last year. The exports that dropped by double digits in the first seven months of this fiscal and showed a marginal growth of 1.47% during Feb 16, registered an impressive growth of 20.58 percent during March 16 as the quantity increased to 534,804 Tons compared to 443,539 Tons during March 15.

Total despatches during March 16 were 3.583 Million Tons compared to 3 Million Tons during same month last year showing a healthy increase of 19.34%. The domestic sales in north during March 16 were 2,460,109 Tons compared to the domestic sales of 2,074,322 Tons during same month last year showing growth of 18.6%. The local sales in South during March 16 were 588,898 Tons compared to the local sales of 485,088 Tons during same month last year showing growth of 21.4%. This depicts that the economic activities have picked up in all regions of the country.

Analyzing the overall situation of current fiscal, the statistics show that during July 15 to March 16, cement industry despatched 23.94 Million Tons in local markets posting a healthy growth of 17.69% compared with local despatches during the same period of last fiscal year that were 20.34 Million Tons.

Exports from the country declined by 19.02% to 4.406 Million Tons compared with exports during the first nine months of last year that were 5.44 Million Tons. The overall situation during first 3 quarters of current fiscal year showed 9.95% growth compared to the same period of last fiscal year as total despatches increased to 28.34 Million Tons against 25.78 Million Tons from July 14 to March 15.

With regards to the turnaround in exports, spokesman of All Pakistan Cement Manufacturers’ Association said the growth in cement exports in March is very encouraging for the industry. He said this enabled the industry to utilize almost 95 percent of its installed capacity.

He said the industry has full faith in the economy of the country and it has kept on increasing its capacity on regular basis, while further increase in capacity to the tune of around 26,000 tons per day is expected to be available after the commencement of DG Khan, Lucky, Cherat and Attock Cement expansions. Other major players are also working on expansion plans: the spokesman added.

The spokesman of APCMA regretted that despite utilization of around 95 percent capacity the industry is being accused of not using their idle capacity and of forming a cartel to keep the rates high. He said the two factors that prove this accusation as baseless are the utilization of installed capacity to maximum and the difference in maximum retail prices in different regions of the country that ranges from Rs. 482 per bag to Rs. 550 per bag. The industry is neither managing despatches nor the prices and is operating on the principles of free market economy, he asserted.

For more information, contact:
All Pakistan Cement Manufacturers Association
Secretary General
secretary@apcma.com
House No. 27-28/3A FCC, Gulberg-IV, Lahore.
Tel: 042-5871632 – 33
Fax: 042-5874442
Emil: apcma@apcma.com

Cement sector demand prudent Government policies, not subsidies

Karachi, June 07, 2012 (PPI-OT): All Pakistan Cement Manufacturers Association has said that while it is thankful to the government for granting minor relief by reducing Federal Excise Duty from Rs. 500 per ton to Rs. 400 per ton effective July 01, 2012 in the budget for the financial year 2012-2013.

APCMA expressed dismay that actual reduction in excise duty felt short by Rs. 150 per ton compared to the promised reduction and the market had already factored in a much higher relief. Prices per bag had registered a decline of Rs. 20 per bag during May.

“However, we need government initiatives that could increase cement consumption which is only possible if the government abolishes Federal excise duty on cement as it is a punitive duty and curbs consumption,” said a spokesman of All Pakistan Cement Manufacturers Association.

In the federal budget 2012-2013, government has made a significant amendment by inserting section 153A to the Income Tax Ordinance, 2001. According to section 153A, the manufacturers shall collect 1% tax on gross sales price from their distributor/dealer/wholesaler.

The proposed provision appears to be aimed at documentation of economy as well as broadening of tax base. However, this provision shall not only stress the cash flows of those distributor/dealer/wholesaler who are already paying final tax on their commission income but also impact the cement prices by Rs. 4 per bag.

In the federal budget 2012-2013, the government has increased annual token tax on vehicle carrying goods from Rs. 1/kg to Rs. 5/kg. The impact of this increase comes to Rs. 1 per bag.

On the other hand, Ministry of Water and Power, Government of Pakistan, vide its notification no. 506(I)/2012 dated May 16, 2012 has increased the power tariff and its average impact to cement industry is Rs. 1.7 per Kwh. Ministry of Water and Power also charged Rs. 1.97 per Kwh as fuel price adjustment for the month of April 2012. The impact of these increases for cement industry comes to Rs. 19 per bag.

Ministry of Petroleum and Natural Resources has increased gas infrastructure development cess from Rs. 13 mmBTU to Rs. 100 mmBTU for industrial sector. The impact of this increase for cement industry comes to Rs. 2.40 per bag.

Cement sector, being a process industry is always required to maintain adequate stock levels for smooth operations. Coal prices have dropped to US $ 95 per ton FOB South Africa, but during the current financial year, average cost to the industry has been around US $ 108 per ton, the same price as in last financial year. The cement industry did not yet get any benefit from reduction in coal prices as Rupee devaluation is expected to offset reduction in FOB price.

He said the cement industry is not asking for subsidies but prudent government policies that should boost the construction industry. The government should come up with two or three large mega projects that are badly needed in the country; he said adding that Pakistan is perhaps the only country in the region that has surplus cement but its cement consumption per capita is the lowest.

He said that local despatches of the industry have decreased by 7.38 percent from 2,241,326 tons in April 2012 to 2,075,936 tons in May 2012 with the North region is suffering the most as its despatches shrank from 1,834,460 tons in April 2012 to 1,633,993 tons in May 2012 whereas the South region has seen a nominal increase from 406,866 tons in April 2012 to 441,943 tons in May 2012.

The spokesman said that cement exports provided some relief to the industry however after few promising years the exports are also on decline. He said in the first 11 months of this fiscal the cement exports have declined by 8.64 percent.

Regarding cement prices the spokesman said that cement is one of the few commodities that are available in Pakistan below international rates. “Its price is Rs. 100 per bag higher across the border in India,” he said adding that this is mainly due to low cement demand in the country. Over 27 percent of the installed capacities are not operative due to lack of demand in the country, he added.

For more information, Contact:
All Pakistan Cement Manufacturers Association
Secretary General
secretary@apcma.com
House No. 27-28/3A FCC, Gulberg-IV, Lahore.
Tel: 042-5871632 – 33
Fax: 042-5874442
Emil: apcma@apcma.com

Cement exports continue to decrease Local dispatch increased by 3.3%

Karachi: Although cement sales in domestic market posted fifth straight month of increase as compared to last year, the industry is still passing through difficult times as its exports registered third consecutive month of decline while its capacity utilization is at its lowest since 2002-03.

A spokesman of the All Pakistan Cement Manufacturers Association stated this while discussing performance of the cement industry during first ten months of the current fiscal.

He said that the total cement dispatches up till April 2012 were 26.643 million tons which is 3.31% higher than dispatches during the corresponding period of last fiscal. He said domestic sales during this period increased by 8.51% but exports registered a decline of 8.91%.

He said performance of North and South based mills depicted different trends both in domestic sales and exports. He said local sales of the North based mills increased by 7.77% to 15.928 million tons while the South based mills registered higher domestic consumption by 11.81% to 3.701 million tons.

In exports, however, the mills in the North suffered comparatively less decline than in the South. The North based mills exported 5.087 million tons of cement posting a decline of 6.23% over exports made during the same period last year. The exports of South based mills declined by 15.29% to 1.928 million tons.

Among the export markets, the Afghanistan market remained relatively stable as exports declined nominally by 0.15% to 3.778 million tons. Exports to India increased by 15.19% to slightly over half million tons. This includes exports by sea, as well as, through Wahga border. Exports to other destinations through sea however decreased by 16.96% to 2.699 million ton.

Cement industry sources says that cement is one the major commodities that is abundantly available in Pakistan and can be exported to India through the land route. Despite tall claims to increase bilateral trade, the respective governments failed to remove non-tariff barriers imposed on Pakistani products.

Following are the main problems being faced by the exporters at Wahga border:

1. On the Indian side there is currently a labour strike resulting in piling up of consignments which is affecting the movement of trucks from Pakistan.

2. Only 10 wheeler trucks from Pakistan are allowed to cross the border and maximum weight may not be more than 40 tons per truck. Unfortunately, most of the available transportation for cement has a loading capacity of more than 40 tons. Availability of 10 wheeler trucks with a loading capacity upto 40 tons for cement is limited; resulting in the cement industry being unable to export its surplus capacity

3. There is only one scanner installed at the new gate at Wahga border resulting in long queues creating hurdles and delay for Pakistani exports to India.

4. The Pakistani exporters have demanded of the government to look into the matter and allow trucks with a loading capacity upto 80 tons instead of 40 tons. “The Pakistani exporters should also be provided all necessary facilities at the border points so that they could easily clear their consignments”.

For more information, Contact:
All Pakistan Cement Manufacturers Association
Secretary General
secretary@apcma.com
House No. 27-28/3A FCC, Gulberg-IV, Lahore.
Tel: 042-5871632 – 33
Fax: 042-5874442
Emil: apcma@apcma.com