Economic slowdown hurts cement exports

[Naveed Yaseen]

* Pakistan’s cement exports in April lower by 12 percent month-on-month

By Moonis Ahmed
KARACHI: The economic slowdown around the world has begun to hit Pakistan’s cement industry, as its exports in April were lower by 12 percent than that recorded in March.

Exports dropped to one million tonnes from 1.1 million tonnes in March 2009.

According to the latest numbers released by the All Pakistan Cement Manufacturers Association (APCMA), exports were up 51 percent year-on-year in first ten months of the current fiscal year.

Nevertheless, the number of 975,000 tonnes witnessed last month was still encouraging when compared with the monthly average of 880,000 tons recorded during the first nine months. Exports now constitute 36 percent of total dispatches (year-on-year).

Country’s cement exports had witnessed a healthy growth of 140 percent to all-time high level of 4.2611 million tonnes in the first eight months of last fiscal year. But the industry is now witnessing downward trend as the global economic slowdown has begun to impact it.

There has been a big drop in regional demand that had been a major factor in enhanced Pakistani cement exports. Industry sources said weaker external demand from Gulf states as well as neighbouring India has depressed export scenario.

Pakistan exports cement to Dubai, Afghanistan, Iraq, India, and some other countries.

Total cement sales declined by 5 percent year-on-year to 2.6 million tonnes in April 2009. Local dispatches came in at 1.6 million tonnes (down 12 percent month-on-month and 17 percent year-on-year), which was close to the monthly average of 1.56 million tonnes recorded during the first nine months.

Overall, cement sales recorded an increase of 0.6 percent YoY (to 24.7 million tonnes) in the first ten months of FY09.

“Uncertain political and economic conditions are the major factors behind subdued local sales. That said, robust demand from Middle East and African countries has kept the export demand intact. As a result, the share of exports in total sales has surged to 36 percent during July-April FY09, compared with 24 percent during corresponding period last year,” said an analyst.

The analyst further said that domestic cement off-take might remain weak owing to low PSDP and economic growth. At the same time, global recessionary woes remain a key risk to exports, he added.

http://www.dailytimes.com.pk/default.asp...2009_pg5_6