PAKISTAN: Cement exports stagnant

Cement exports have shown a dismal performance as witnessed by a paltry 0.21 percent increase in the first quarter of the financial year 2012 (FY2012) compared to corresponding period last year. According to a statement issued by All Pakistan Cement Manufacturers Association (APCMA), exports to different countries via sea route have dropped significantly by 24 percent compared to first quarter 2010-11, standing at 0.857 million tonnes in first quarter 2011-12. 

Exports to India increased by 53.8 percent but the small volume of 0.163 million tonnes only in the first quarter 2011-12 was contrary to expectations of an over 1.0 million tonnes increase owing to improving trade relations between Pakistan and India. According to the statement, major factor behind limited exports is sharp increase in input cost as prices of almost all of major inputs like, furnace oil, coal and electricity etc have surged during first quarter of this financial year. The transportation cost has also increased exorbitantly due to increase in diesel prices. In the meantime, there was no progress in cement exports by truck via Wagha Attari border post, which if opened, can substantially boost export volume. 

Cost of power has increased by 9 percent during last three months from Rs 7.1 per kWh to Rs 7.7 per kWh with increasing load shedding and the situation seems set to become worse with expected further increase of Rs 3.04 per kWh in power tariff. Rates of diesel, coal and furnace oil have also increased by 15, 8 and 28 percent respectively in first quarter of FY 2012 and the impact of this increase for the upcountry plants is much higher as these inputs have to be transported from Karachi. Gas rates have also increased during last 3 months by over 10% for cement plants and as well as their captive power units. However, local cement sales improved due to a slight increase in local consumption, which witnessed a growth of 12.23% during the first quarter of current fiscal year 2011-12. The cement manufactures of the northern region have sold 4.23 million tonnes cement, while southern mills sales stood at 0.945 million tonnes in Jul-Sep 2011 period.