By Hamid Mahmood ISLAMABAD, Nov 09 (INP-WealthPK)- In August 2021, Pakistan’s cement industry grew by 22.77 percent, with total dispatches of 4.336 million tonnes, up from 3.531 million tonnes in the same month the previous year. Local cement dispatches jumped to 3.814 million tonnes in August 2021 as compared to 2.805 million tonnes in August 2020, according to statistics released by All-Pakistan Cement Manufacturers Association (APCMA). This represents a robust 35.98 percent rise. Export shipments, on the other hand, continued to fall, dropping by 28.24 percent from 726,687 tonnes in August 2020 to 521,468 tonnes in August 2021. Overall, cement sales in the first quarter of the financial year 2021-22 fell by 5.7 percent to 12.8 million tonnes from 13.6 million tonnes in the corresponding period of the previous year, according to an APCMA representative. The fall is due to rise in coal prices, Pakistani Rupee's depreciation, and constantly rising petroleum, electricity and energy prices. Domestic cement sales climbed by 4 percent to 11.3 million tonnes per year, up from 10.9 million tonnes per year due to increased local construction activity. These price hikes have had a significant impact on the cost of doing business in both domestic and foreign markets. The APCMA representative said the manufacturers are optimistic that the cement business will restore its development pace in the coming months owing to government initiatives in the building industry. Cement is an extremely essential industry for the country's economic development. The cement sector's success has a direct impact on the country's infrastructure development and building operations, as well as several related industries (steel, wood, tiles, and so on). The sector's overall size was evaluated at Rs345,054 million in FY19-20 (FY18-19: Rs413,879 million), down by 17 percent year-on-year (YoY), due to lower retention prices in the north despite more supply and fewer exports. The cement industry is dominated by 19 companies with 24 plants. The sector is divided into two parts: north and south, with Punjab, Khyber Pakhtunkhwa and Azad Jammu and Kashmir (AJK) in the north, and Sindh and Balochistan in the south. The cement sector is well-organised with most companies listed on the Pakistan stock market. The market capitalisation of the sector is projected to be over Rs690 billion. The expansion of the industry is mostly driven by the overall economic growth and government investment in development projects. Pakistan's per capita cement consumption is approximately 182kg, but the global average is over 500kg, more than double of Pakistan's consumption, indicating a huge potential for cement demand development. Local cement sales increased by 20.40 percent to 48.119 million tonnes in FY20-21, up from 39.965 million tonnes in FY19-20, a good sign under the Naya Pakistan Housing Scheme and the Public Sector Development Programme (PSDP). Despite concerns caused by Covid-19, Pakistan's cement sector has continued to thrive as a result of timely government efforts. Private-sector construction, together with work at the Bhasha and Dasu dams, contributed to the surging local demand. The government announced an incentive package for the construction industry in April 2020, which benefited the economy, especially private-sector home initiatives. The package included tax reductions and a Rs36 billion subsidy under the Naya Pakistan Housing Scheme. Furthermore, banks have been told to increase construction sector loans to 5 percent of their total loan book, and the Federal Excise Duty (FED) reduction in cement prices from Rs2/kg to Rs1.5/kg has encouraged the industry. Foreign Direct Investment (FDI) and Long-Term Financing Facility (LTFF) have increased dramatically in the construction industry. According to APCMA, FY21 was an excellent year for cement since the demand increased significantly. Due to increased allocation in PSDP and in projects related to the China-Pakistan Economic Corridor (CPEC), as well as boosting housing and industrial demand, the cement industry is expanding its capacity from 70 million tonnes to around 100 million tonnes with the expected 15 percent demand increase annually for the next three years.