Cement export may fall

[Naveed Yaseen]

By M Farhan Zaheer
KARACHI: Global economic slowdown and its affect on construction activities has started swallowing export orders of Pakistani cement companies and indicating the declines in export orders, said Al-Abbas Cement Industries General Manager, Kamal Ahsan.

Local cement industry had been enjoying growth in cement exports during the last fiscal year. But now with the global slowdown construction activities may slash export orders of Pakistani cement companies.

Recent quarterly figures of high exports of local cement are due to the orders that were placed earlier, which do not mean that local companies are receiving new orders, Ahsan said.

Considering the current situation, China has reduced its cement prices in international market which shows that Pakistani cement companies may face tough time in future with this development, he added.

Local cement companies use imported coal which shares major cost of cement. Fortunately coal prices have come down from over $190 per tonne to $145 in some months, and this will help local cement companies in reducing cost of production.

But, he maintains that though the prices of coal in international market are declined considerably, its positive effect would be felt in next four months because generally cement companies place coal import orders four months in advance.

Cement sales in first quarter from July to September of fiscal year 2008-09 had depicted a fall of 15 per cent to stand at 4.88 million tonnes. On contrary, exports continued with their growth of 58 per cent to 2.47 million tonnes owing to the cement shortage in the region. Hence, overall cement sales were up just 1 per cent to 7.35 million tonnes.

In September 2008, local cement sales fell by 14 per cent YoY while exports increased 60 per cent resulting in an increase of 3 per cent. Apart from economic conditions, local sales decline in September can also be attributed to Ramazan during which construction activities usually slowdown.

Walibhai Patel, a cement dealer in Karachi said owing to low construction activities in city, cement sales have declined by more than 60 per cent, and uncertain economic conditions, high inflation are further infuriating the situation.

Local cement sales have also been affected because of the high prices for instance a 50 kg cement bag is being sold in Rs350 to Rs375 which according to cement companies is a result of high cost of production. Meanwhile, projects are being closed down and new projects are not being taken owing to the economic condition of the country, he explained.

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Cement sector’s growth down by 15.4pc

Saturday, November 01, 2008
By Jawwad Rizvi

LAHORE: Local cement growth has registered a 15.43 per cent decline in the first quarter of this fiscal (July-September 2008-09) and 4.833 million tonnes was sold as compared to 5.715 million tonnes during similar period last year.

All Pakistan Cement Manufacturers Association (APCMA) Chairman and Pakistan Cement Managing Director, Rehmat Khan commenting on the decline of domestic cement utilisation said that a number of projects under Public Sector Development Programme (PSDP) were not initiated, which halted the construction activities in the country.

Overall economic downturn, political instability, law and order situation has slowed down has delayed launching of new projects. Domestic cement utilisation growth year on year basis was down by 20 per cent. He said no major infrastructure project is being carried out across the country.

However, a quantum increase of 57.54 per cent has been recorded in the cement’s export in the first quarter of the fiscal year. Pakistan has exported 2.497 million tones cement to Afghanistan, Indian and other countries of the world in the first quarter of fiscal year 2008-09 as compared to the last year 1.565 million tones.

In the July 2008 local cement utilisation has recorded 1.790 million tones as compared to the July 2007 1.947 million tones, registering a decline of over 8 per cent. Similarly, the domestic cement utilisation in August and September 2008 has recorded a decline of over 21 and 17 per cent respectively.

The utilisation of cement in August 2008 has recorded 1.545 million tonnes and in September 1.49 million tonnes as compared to August 2007, 1.963 million tonnes and September 2007 1.805 million tonnes.

In the first quarter a substantial increase has been witnessed in export of cement to India and other parts of the world through sea route while a meagre incline has been recorded in cement’s export to Afghanistan.

The cement export to Afghanistan through land routes in the first quarter has recorded 750,504 tonnes as compared to corresponding period of last year 744,002 tones.

On the other hand a reasonable increase in exports of cement to India has been recorded, as no cement export has been recorded in July-August 2007 due to restrictions imposed by Indian government while export started in September 2007 and Pakistan had dispatched only 11,316 tones cement to India.

However, in the first quarter of this fiscal year Pakistan has exported 189,019 tonnes cement to India. parts of the world through sea route while a meagre incline has been recorded in cement’s export to Afghanistan.

The cement export to Afghanistan through land routes in the first quarter has recorded 750,504 tonnes as compared to corresponding period of last year 744,002 tones.

On the other hand a reasonable increase in exports of cement to India has been recorded, as no cement export has been recorded in July-August 2007 due to restrictions imposed by Indian government while export started in September 2007 and Pakistan had dispatched only 11,316 tones cement to India.

However, in the first quarter of this fiscal year Pakistan has exported 189,019 tonnes cement to India.

http://www.thenews.com.pk/daily_detail.asp?id=144145