KARACHI: Local cement sales fell by 27.54 percent year over year to 2.752 million tons in August as a result of tax-driven price rises and a slowdown in construction during the monsoon season and construction.
Moreover, cement exports decreased by 16 percent to Rs613,857 tonnes in August 2023 from 730,755 tonnes.
Consequently, total cement despatches (local sales and exports) fell from 4.528 million tonnes in August 2023 to 3.366 million tonnes, a 26 percent decline.
The All Pakistan Cement Manufacturers Association (APCMA) issued data showing that total cement dispatches for 2MFY25 were 6.375 million tonnes, an 18% decrease from 7.758 million tonnes during the same period last fiscal year.
In August, overall dispatches decrease by 26%.
Domestic shipments decreased by 21% in 2MFY25 to 5.214 million tonnes from 6.578 million tonnes in the same time the previous year. Additionally, export dispatches decreased by 1.65 percent due to a decrease in volume to 1.161 million tonnes from 1.181 million tonnes in July and August of FY24.
APCMA spokesman: Due to the industry’s struggles with rising taxes and unstable economic conditions, domestic demand has been steadily declining over the past 12 months. According to him, August’s building efforts were also affected by intense monsoon rains.
Federal Excise Duty (FED) on cement has been doubled in the current budget, and other federal and provincial taxes have also been sharply increased. No other industry has been taxed in such a massive amount, he said, calling on the government to reevaluate the tax policies because the construction industry is struggling as a result of a persistent drop in domestic demand, which is hurting employment opportunities for both skilled and unskilled labor and adding further strain to the already fragile economy.
According to Nasheed Malik of Topline Securities, the August sales drop was caused by a slowdown in building operations, which was primarily brought on by increased input costs and 19% and 29% YoY increases in cement bag prices in the North and South, respectively.
One major development in August was the Punjab-based players’ successful court-ordered stay of higher royalty per bag. But in the middle of the month, bag costs went up by Rs65–75 since bank guarantees were provided.
According to him, the use of cement capacity in August was anticipated to be 47%, compared to 44% in July and 66% in August 2023.
According to figures from the Pakistan Bureau of Statistics, he added, the average retail price in August climbed by 1% in the North and stayed essentially steady in the South.
