By:Naveed Ahmad Khan
The cement sector has achieved the highest ever despatches in September 2020. The total despatches during September 2020 were 5.213 million tons against despatches of 4.273 million tons in September 2019.
The local uptake of cement in September 2020 increased by 17.65 percent to 4.089 million tons from 3.475 million tons in September 2019 while exports registered an increase of 40.95 percent, increasing to 1.124 million tons from 0.797 million tons in the same month last year.
In the north region, domestic cement despatches increased by 16.30 percent to 3.523 million tons during September 2020 from 3.029 million tons in September 2019. Exports from the north increased by 9.27 percent to 0.287 million tons in September 2020 from 0.263 million tons in September 2019.
There has been a positive growth in the southern region as well where the domestic cement despatches increased by 26.84 percent to 565,236 tons from 445,629 tons in September 2019. Exports from the South continued to grow and increased by 56.53 percent to 837,033 tons in September this year from 534,751 tons in September 2019.
Total cement despatches during the quarter increased by 21.88 percent to 13.573 million tons from 11.136 million tons in July-Sep 2019. Domestic despatches registered a healthy increase of 18.84 percent, increasing from 9.120 million tons to 10.837 million tons. Exports also showed encouraging growth increasing by 35.67 percent from 2.016 million tons to 2.735 million tons.
The cement industry in Pakistan made large investment in new plant and machinery and modernization over the last few years, which has helped the consumer the availability of cement at very competitive rates compared to other countries in the region.
Cement is a basic commodity required to play an important role in the development of the country, is subject to very high taxes including Federal Excise Duty of Rs. 1,500/- per ton equivalent to Rs. 75/- per bag. Government must abolish Federal Excise Duty as this is not a luxury product.
The recent construction package announced by the Prime Minister of Pakistan has helped the industry in terms of growth and is fully aligned to support the government in its efforts to restart the development and reindustrialization. Although cement industry faced huge losses during the financial year 2019~2020, the recent raid by Competition Commission of Pakistan was a demoralizing action against industry.