Pakistan: The Pakistan cement industry despatched 7.71Mt in the first three months of the Pakistan fiscal year that started on 1 July 2012, according to a statement from the All Pakistan Cement Manufacturers Association (APCMA). This compares to 7.50Mt in the same period in the 2011-2012 year.
Local demand increased during the quarter by 5.3% but a decline in exports by 2.68% reduced the overall gain in despatches to 2.81%. In September 2012 plants in north of the country despatched 1.50Mt of cement for the domestic market and exported 0.63Mt. Mills in the south despatched 0.29Mt of cement for the domestic market and exported 0.18Mt.
The statement went on to explain that the total production capacity of the Pakistan cement industry had increased to 44.8Mt but that low capacity utilisation is acutely more 'painful' for those units that have increased their capacity in recent years. Servicing debt has now become a major component of cost, even after three interest rates cuts since April 2012, as the effective bank mark-up for the industry remains above 12%. APCMA appealed to planners to provide some industry-specific interest rebate to the cement industry to keep it afloat.
With the Pakistan cement industry operating at 68.86% of its installed capacity, industry circles are worried by the stagnant domestic demand and continuously declining exports that is hurting the viability of the industry.
"Exports to India have been on constant decline ever since the two countries opened their borders for liberal bilateral trade. The decline is not due to lack of cement demand in India but because of very stringent non-tariff barriers erected by our neighbour," the statement said.
