Displaying items by tag: APCMA

Pakistan: Capacity utilisation in the Pakistan cement industry has fallen to 68.3% in the first two months of the 2013 financial year, according to data released by the All Pakistan Cement Manufacturers Association (APCMA). The figure is the lowest since 2002.

Demand for cement declined during July 2012 and August 2012 due to Ramadan and heavy rains in the country. Total cement despatches declined by 1.64% in July and 2.82% in August.

Exports of cement have also started to decline in Pakistan since hitting a high of 11Mt in 2008-2009. In 2011-2012 exports were 8.57Mt. This decline has continued in 2012-2013 as exports fell year-on-year by 5.87% during July 2012 and August 2012 to 1.46Mt from 1.55Mt

Exports to India decreased by 38% in July 2012 and August 2012 to 75,800t. They have been declining since India and Pakistan opened their borders for liberal bilateral trade.

"The decline is not due to a lack of cement demand in India but because of very stringent non-tariff barriers erected by our neighbour," said the APCMA. It added that cement from Pakistan is preferred in India due to its better 'quality.'

Pakistan is unable to export larger quantities of cement to India due to trade barriers, labour shortages on the Indian side of the Wagah border crossing, and short supply of railway wagons. The APCMA has also blamed delays in cement plants registering for export licenses.

Exports to Afghanistan are also declining due to economic slowdown. Exports declined by almost 5% in July 2012 and August 2012.

Pakistan: The All Pakistan Cement Manufacturers Association (APCMA) has revealed that the Pakistan cement sector remained under financial pressure during the fiscal year 2011-2012, which ended on 30 June 2012. This was attributed to increases in input costs in electricity, diesel, paper sack and gypsum and a devaluation of the Pakistani Rupee. However, for the same period the industry's local cement despatches met the highest levels ever recorded in the country.

Revealing the performance of the cement sector in the fiscal year 2011-2012, a spokesman for APCMA said that local cement despatches were 23.9Mt, an increase of 8.84% year-on-year. However exports remained under pressure throughout the year and declined by 9.12% to 8.57Mt. 2011-2012 was the third consecutive fiscal year when exports declined.

In 2011-2012 the cement sector increased its capacity by 3Mt. Total production capacity increased by 7.23% to 44.2Mt from 42.2Mt in 2010-2011. Capacity utilisation remained under pressure due to sluggish export demand, a sluggish construction sector, lack of investment in the housing sector and the government's 'inability' to initiate mega-projects.

Exports to India were only 0.61Mt in 2011-2012, a figure well below the expectations of the cement sector. However, exports to Afghanistan remained stable at 4.72Mt in 2011-2012. Exports to other destinations by sea declined to 3.25Mt, a drop of 17%.

Pakistan: Cement manufacturers in Pakistan are regretting their decision to increase capacity as consumption has remained stagnant over the past four years, according to the All Pakistan Cement Manufacturers Association (APCMA). Exports are also declining, forcing the sector to operate at 69% of its installed capacity.

An APCMA spokesman explained how capacities were increased when the economy was booming and that most of the plant capacities were increased in the northern part of the country. For these regions Afghanistan was the only export market but its potential was limited. Exports to India were limited at that time and today as well due to many non-tariff barriers erected by India.

The spokesman regretted that the growth during the past four years had been much below expectations and that the government also failed to provide funds for, what he called, 'essential' infrastructure. The fierce competition between the mills sitting on huge capacities kept the rates of the commodity much below the average inflation in the country, he added. Rates of inputs of the industry increased in line with the inflation and rupee devaluation while the cement prices increased by just 6% from the average cement rates in 2006.

The APCMA spokesman added that exports, which provided some relief to the industry in the past few years, have declined at a rapid pace during the first eight months of the current fiscal year (July 2011 to February 2012). During this period the decline in exports was 5.57% to 5.62Mt from 5.95Mt during the corresponding period in 2010-2011. He said that exports to India, mostly via train, had increased by 39.5%.

Pakistan: The Competition Commission of Pakistan (CCP) has conducted searches and inspections at the premises of the All Pakistan Cement Manufacturers Association (APCMA) and Kohat Cement in Lahore under Section 34 of the Competition Act 2010. It said that it carried out the searches to look for proof of suspected cartelisation in the cement sector.

According to a statement issued by the CCP, it had obtained information from an informant that contained copies of certain e-mails that had been sent by the Secretary of APCMA to cement manufacturers. The contents of the e-mails provided by the informant revealed that the cement manufactures had prima facie collectively devised a vigilance plan by which the cement dispatches at one cement production unit are monitored by a team of another unit and vice versa.

Such monitoring of cement dispatches was previously recognised as an integral part of a collusive arrangement among the cement manufacturers. The CCP has declared such arrangements to be in violation of Section 4 of the Competition Act 2010. It imposed a penalty of nearly US$700m on the APCMA and its members. This matter has been taken to court and is still pending.

The fresh probe by CCP was based on a separate set of facts that suggested that the cement manufacturers have again formed a collusive arrangement and to ensure compliance the monitoring function is being performed by cement manufacturers themselves under the auspices of APCMA. When the CCP search and inspection team arrived at the APCMA premises, it discovered that the APCMA secretary was not present in the office and all the records were locked. After initial hesitation the APCMA allowed the CCP to access the data. A search and inspection was also carried out at of the office of the APCMA President, who is also the Chief Executive of Kohat Cement.

Local media has long speculated that cartelisation was in place in the cement sector based on rapid cement price increases in recent months. Pakistan's cement capacity utilisation also dropped to a 10-year low of 69.7% in the six months to 31 December 2011. "The expected turn around in the economy did not materialise because the capacity of the sector continued to increase," said a spokesman from the APCMA, commenting before the CCP inspections were made. He said that expansions in the cement sector had been planned several years ago when the economy had been in a far better situation.