Trade Chronicle May - June 2020

Cement Industry
Pakistan Economic Survey reviews
the performance of the cement industry for FY20
the region increased by 14.3 percent,
from 0.351 Mt in March 2019 to 0.401
Mt in March 2020.
Pakistan government has released
Economic Survey for the year FY 2019-
20 on the eve of Federal Budget FY
2020-21. The survey reviews
government incentives for the cement
industry, account of dispatches,
export, and mining lease issues.
Pakistan labeled the construction and
cement industry a significant source of
growth and investment in the future.
The gover nment has already
introduced an incentive package for
the construction industry in April 2020,
anticipating to help increase local
cement consumption. Package
includes an amnesty scheme, tax
exemptions, and PKR 30 bn subsidy
for Naya Pakistan. Furthermore, the
construction sector was given industry
status.
To promote investment and to boost
the trust of investors, the Punjab Mines
& Minerals Department has lifted a ban
on grant/renewal of mining concession
to the cement sector after almost five
y e a r s ! C u r re n t l y, a ro u n d 2 6
applications are being processed for
the grant of mining concessions of
cement raw material.
Similarly, Balochistan province has
large deposits of Limestone, Gypsum,
and Coal (raw material for cement
manufacturing), and great investment
opportunities for the installation of
cement factories are available. Seven
applications for grant of exploration
and Mining Lease are under process for
cement raw material in Director
General of Mines & Minerals office in
Quetta. After completion of the study
reports, the licenses will be granted.
Dispatches/ Export of cement
Pakistan cement industry has reported
healthy growth during the first nine
months of the current fiscal year, July-
March FY2020. Cement sector
performance is backed by the
increased exports mainly clinker, which
went up by 100 percent during the
period. Domestic demand for cement
has picked up the pace as the
government increased the
development expenditures,
and improved remittances
inflow may have uplifted
private construction activities.
COVID-19, as expected, had
its impact on domestic
consumption of cement
industry that declined by 16.7
percent in March 2020.
Exports also grew at the
slowest pace of 5.27 percent
as the global markets are
equally under pressure due to the same
reason. Total dispatches (local and
shipping) in March 2020 declined by
14.25 percent to 3.721 Mt from 4.340
Mt in March 2019. The pressure was
more substantial from the domestic
market, where the uptake was reduced
3.214 Mt in March 2020 from 3.858 Mt
in March 2019. Exports though inched
up from 0.482 Mt in March 2019 to
0.507 Mt in March 2020.
Northern Region
Domestic consumption in the northern
part of the country declined by 10.48
percent as it was only 2.749 Mt in
March 2020 compared to 3.071 Mt in
the same month last year. Exports from
northern mills also declined by 18.9
percent and reached to 0.107Mt in
March 2020 from 0.132 Mt in March
2019.
Southern Region
Domestic dispatches from mills in the
southern part of the country reduced
by 41 percent and reached to 0.464 Mt
in March 2020 as compared to 0.787
Mt in March 2019 while exports from
Cumulative Dispatches
Total local dispatches during Jul –
March FY20 increased by 3.83
percent, to 30.588 Mt from 29.461 Mt.
Total exports rose to 6.446 Mt (25.63
percent increase) from 5.131Mt during
the same period last year.
The northern region entirely drove the
growth in local sales while the south
contributed to export performance.
According to the APCMA, local
dispatches from the north increased by
12.09 percent, while the southern
region showed a decline of 26.8
percent during July altogether opposite
to local sale. Exports from the south
increased whereas, the northern part
came up with a 3.70 percent decline
during the period.
The export of cement witnessed a
decline of 5.1 percent in value, and its
quantity increased by 7.3 percent
during the period under review.
However, Pakistani cement exports
this year had become more diverse in
terms of market access than last year,
when India was the principal importer
of Pakistani Portland Cement,
importing one-fourth of Pakistan's
quantum cement exports. However,
pulled down by low unit prices.
(A Chronicle Report)
TRADE CHRONICLE - May.~ June. 2020 - Page # 29