LAHORE: Cement dispatches in the country have declined in April 2020 by 23.65 percent to 3.52 million tons from 4.61 million tons in April 2019 as both exports and domestic markets crashed owing to the devastating impact of COVID-19.
According to a statement issued by the All Pakistan Cement Manufacturers Association (APCMA), the cement sector that was already struggling to survive on extremely high input costs have been badly hit due to lockdown in the first half of the month.
The decline in domestic consumption was witnessed both in the north and south zones of the country as it fell 18.97 percent to 3.271 million tons in April 2020 from 4.037 million tons in the same month last year. Domestic dispatches from the mills in southern part of the country fell by 49.85 percent from 0.683 million tons in April 2019 to only 0.342 million tons last month whereas the mills based in north dispatched only 2.928 million tons domestically in April 2020, down by 12.68 per cent from 3.353 million tons in the same month last year.
Exports have recorded the first instance of decrease this year as they fell from 574,026 tons in April 2019 to a mere 249,127 tons last month, depicting a decrease of 56.6 per cent. Exports from the southern zone declined by 27.97 percent; from 343,611 tons in April 2019 to only 247,519 tons in April 2020. The situation was even more dismal for the mills situated in the north as the exports in April 2020 were negligible at 1609 ton, falling 99.3 percent from 230,415 tons in April last year.
The total dispatches though inched up by 3.45 per cent to 40.55 million tons in the first ten months of this fiscal as compared to 39.20 million tons during the same period last year, mainly on the strength of better performance in pre-pandemic months.
Domestic dispatches from north increased by 8.96 per cent to 28.941 million tons during July19-Apr 20 from 26.561 million tons in July18-Apr19 whereas the mills in south has recorded a significant fall in local dispatches, down 29.11 percent from 6.936 million tons in the first 10 months of the last fiscal to 4.917 million tons this fiscal.
Exports from South rose by 37.08 per cent from 3.486 million tons in the first ten months of last fiscal to 4.779 million tons this year whereas the mills in North registered 13.63 per cent decline in exports, falling to 1.916 million tons from 2.219 million tons last year.
“The decline in construction activities around the world including Pakistan contributed to a downfall in demand, however, the cement sector even otherwise was operating under acute distress,” said the spokesman of APCMA.
The federal excise duty and sales tax were Rs. 1,460/- per ton (Rs. 73 per bag) in 2012-2013 while currently it is Rs. 3,380/- per ton (Rs. 169 per bag) - an increase of 132% during the last seven years. The sector paid a higher price of coal as imports were planned pre-pandemic, higher power rates, higher packing material rates and higher wages than six years back. The highest ever interest rates also impacted the balance sheets of most cement units.
“The construction sector got numerous tax concessions in the construction package announced by the federal government but it will prosper only if the industries related with it are also duly accommodated through tax concessions,” said the APCMA spokesman.