September 22, 2020

Cement Factories Have Reduced Production Capacity To 75pc: APCMA

According to the All Pakistan Cement Manufacturers Association (APCMA) spokesperson, the cement sector is now operating at 75pc capacity, down from 85pc, just 2 months ago. However, some officials claim that the sector has reduced production by 50pc due to several factors.

Some blame that the CNIC based invoicing policy of the government has adversely affected the sales of the cement. Moreover, the lack of investments in the construction sector from the private or government sector is also to blame for the lower production of cement. Another factor for the decline in cement sales locally is the new government policy of axle-load restriction. An official from a private cement company said that a ten-wheeler truck could previously transport 700 bags of cement and now two trucks are required to transport the same quantity. This led to greater transportation costs and hence a decrease in demand. Another major reason is the increase in the prices of steel and cement, which have increased the prices of construction by almost 30pc. Besides, the imposition of 200pc import duty on Pakistani cement in Indian has brought the exports of cement to India to a halt.

An official working for a private cement company said that the sales in the southern region of his company have fallen from 23,000 tons a day in June to only 15,000-16,000 tons a day in this month, and that the cement sales of his company have declined by almost 40pc. All Pakistan Cement Distributors Association Chairman Chaudhry Munir told local newspaper  that cement off-take from the northern region has decreased from 100,000 tons/day to 70,000-80,000 tons/day.

The Association of Builders and Developers Chairman Mohammad Hassan Bakhshi said that the construction prices have increased almost 30pc-40pc this year and new projects are also not being announced. He added that the market lacks buyers, as the overall economic condition has greatly reduced the buying capacity of the people.

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