LAHORE: Cement sales – local and exports – surged around 16 percent to 28.6 million tons in the first half of the current fiscal year of 2020/21 as demand in domestic market accelerated due to the attractive incentives announced by the government for the construction sector, industry data showed on Monday.
Total cement dispatches stood at 24.8 million tons in the corresponding period a year earlier. Local sales increased 15.9 percent to 23.6 million tons. Exports increased from 4.2 million tons to 5 million tons, showing a growth of 14.6 percent.
Government announced tax amnesty for the construction sector to compensate economic losses caused by coronavirus-led lockdown.
Analysts are expecting further growth in cement sales if cost of production is brought down.
Coal prices increased almost $35 per ton during the last six months, said a spokesman of the All Pakistan Cement Manufacturers Association (APCMA).
“Duty and taxes on cement sector are also very high,” he said. Cement is subject to Rs1,500 per ton of federal excise duty and 17 percent general sales tax. Total direct taxes on cement per bag are Rs152 per bag. Tax concessions on cement sector will reduce the cost of production and boost construction activities and employment, he added.
APCMA said the Federal Board of Revenue is in process of implementation track and trace system on major sectors such as tobacco, cement, sugar and fertiliser. “The APCMA has already requested the government to implement track and trace system on cement sector as this would help to promote level playing field and boost revenues for the country by curbing any tax evasion,” said the spokesman.
Cement sales from north-based factories increased 16.2 percent to 20.2 million tons during July to December. Exports from the north decreased 14.7 percent to 1.2 million tons. In the south region, cement sales increased 13.9 percent to 3.4 million tons. Exports from the south increased 28.7 percent to 3.8 million tons.
In December, total cement dispatches were 4.8 million tons as against 4.3 million tons during the same month a year earlier. Local cement dispatches increased to 4.2 million tons in December 2020 from 3.5 million tons in December 2019, depicting an increase of 17.5 percent. However, second consecutive drop was witnessed in cement exports. Exports dropped from 769,986 tons to 633,431 tons.
In the north region, domestic cement dispatches increased 17.1 percent to 3.5 million tons from 2.9 million tons. Exports from the north region decreased 40.5 percent to 123,000 tons.
In the south region, domestic cement dispatches increased 19.5 percent to 682,854 tons. Exports from south decreased 9.4 percent to 510,000 tons in December.
The reason for decrease in exports from south for last two months is due to heavy congestion at ports and as per the directives of the government, the priority berthing is given to imports of wheat, sugar and canola vessels. This is causing a great loss of exports of cement and clinker from Pakistan as customers are diverting their ships to other destinations in the region to load cement and clinker due to heavy congestion at ports.
“Exports should be given priority so that industry can earn maximum foreign exchange for the country,” said the industry’s spokesman.
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