Cement Sales Experience Drop Amidst Higher Taxes and Input Costs

In July 2024, Pakistan’s cement industry witnessed a decline in overall sales, with a notable drop of 6.81% compared to the same month last year. Cement sales for July 2024 amounted to 3.010 million tons, down from 3.230 million tons in July 2023, according to data from the All Pakistan Cement Manufacturers Association (APCMA).

Local cement sales experienced a significant decrease of 11.41%, falling to 2.463 million tons from 2.780 million tons in July 2023. This decline reflects a continued trend of reduced domestic consumption, attributed to sluggish economic activity in the country.

On the export front, however, cement manufacturers saw a 21.65% increase in sales, with exports rising to 547,162 tons from 449,792 tons the previous year. This uptick in exports partially offset the decline in local sales.

The distribution patterns for north and south-based cement mills displayed contrasting trends. North-based mills dispatched 2.192 million tons in July 2024, representing an 11.40% decrease compared to 2.474 million tons in July 2023. In contrast, south-based mills recorded an 8.20% increase in sales, reaching 817,799 tons compared to 755,824 tons the previous year.

Domestically, north-based mills dispatched 2.093 million tons, down 11.01% from 2.352 million tons in July 2023. South-based mills, on the other hand, saw a 13.62% decline in local market dispatches, totaling 369,557 tons compared to 427,847 tons the previous year.

Export trends also varied between regions. North-based mills saw an 18.79% decrease in exports, with volumes dropping from 121,814 tons in July 2023 to 98,920 tons in July 2024. Conversely, south-based mills enjoyed a 36.67% increase in exports, rising from 327,977 tons to 448,242 tons.

An APCMA spokesman highlighted the adverse impact of higher taxes and increasing input costs on the cement sector. This marks the 11th consecutive month of declining domestic sales, a trend driven by ongoing economic challenges. The industry has urged the government to reassess its taxation policies to alleviate the financial strain on this crucial sector.

The spokesman also expressed concerns over the government’s documentation drive, stating that the imposition of complicated sales tax systems and mandatory Point of Sale (POS) installations for very small retailers may not effectively boost sales tax revenue. Given that cement is a Third Schedule item, the full amount of sales tax on consumer prices is already borne by manufacturers.

The cement industry continues to advocate for policy adjustments to support its stability and growth amidst challenging economic conditions.