A principal manufacturer attributed the downturn to non-payment of ‘inland freight subsidy’ by the government.
Figures of outstanding amount varied but financial officials at several companies put the finger on or about Rs400 million.
Producers and traders of concrete like other commodities lamented the delay in declaration of Trade Policy 2010-11. “It normally follows on the heels of the Federal budget, but this year, there is no sign of it yet”, said a person associated with the trade.
“The inland freight subsidy on cement at 35 per cent of the actual freight was effective from March to June”, he stated and added that the industry was anxiously waiting to see if the Trade Policy announces its continuity.
July sales numbers of cement at 2.5 million tons fell far short of 2.9 million tons sale in both June and the corresponding month last year.
Producers and analysts blamed several factors including early monsoon and drop in effective industry capacity. “Many cement plants unable to float in a sea of financial crisis have closed down this year”, said an owner of a large company in the North.
Mills going out of business include Dewan Hattar; Dandot; Dadabhoy and Javedan. A few such as Kohat, Gharibwal and Pioneer were being under-utilised for variety of reasons.
But another cement manufacturer exuded optimism. He disagreed that cement sales were rolling down the hill, saying that one month figure can not be a justifiable measure of entire year’s trend.
He emphasised that sales of concrete were cyclical and that despatches in July were also hampered by transporters’ slowdown.
Most experts were, nonetheless, looking at a cement glut going forward since sales would naturally decline as construction had replaced destruction by the flash floods sweeping across the country.
Rains and floods have damaged roads and infrastructure, making transportation of concrete an arduous task
A producer who conceded to a possible sales slump in the local markets in the upcoming month of Ramazan, held on to the hopes of sustained exports to countries such as Iraq, Sri Lanka and those in the African continent.
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