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Cement Sales Drop By 50% to Almost 70,000 Tons Per Day


LAHORE– The cement sales in the country have declined by more than 50 percent to almost 70,000 tons per day from 145,000 tons per day mainly due to the restriction of CNIC, as majority of the dealers are unregistered.

Moreover, the high inflation and huge depreciation of the rupee versus US dollar along with record rise in interest rate have also hit the cement sector hard and enhanced its cost of production manifold.

According to industry experts, more than 60 percent cement sales in the country are made by unregistered dealers, who were not willing to abide by the new rule of the Federal Board of Revenue of presenting CNIC.

They said that the condition of Computerized National Identity Card on purchase of goods worth more than Rs,50,000 has led to a significant decline in cement sales.

Owing to the CNIC condition, cement sales have plunged almost 50 percent because majority of the cement dealers are unregistered and the demand which used to stand at 145,000 tons per day earlier, has now dropped to around 60,000 tons.

According to the data, the country’s total cement dispatches during 1QFY20 went up by 2.56 percent to 11.133 million tons. Out of total sales, local dispatches were up to 9.116m tons from 9.063m tons while exports grew by 12.54pc to 2.017m tons from 1.792m in 1QFY19. In September, total dispatches increased by 11.51 percent to 4.270 million tons compared to the corresponding period last year.

During the month, domestic consumption reached 3.472m tons from 3.114 million tons during the same month last year. Exports rose to 0.798 million tons last month as compared to 0.715 million tons in September 2018.

Local consumption in the northern region during the month under review swelled by 22.4pc to 3.027m tons from 2.47 million tons in September 2018. The southern region witnessed 30.48pc drop in dispatches to 0.446m tons from 0.64 million tons in September 2018.

Industry experts said the lopsided consumption pattern has benefited plants located in the northern region while those operating in the south have entered the red zone in view of over 32 percent drop in uptake during the first quarter of this fiscal year.

They said the country has the potential to produce about 60 million tons of cement per year. Recently, A cement company has closed its old plant, which had production capacity of 3,150 tons per day. The government has given tax benefits on the introduction of new technology in cement plants.

At present, the interest rate in Pakistan is so high that no one is considering starting a new business. Overall, the economic slowdown, reflected in a nine-year low economic growth rate of 3.3 percent in FY19 has caused a sharp fall in cement demand.— PRESS RELEASE