Cement exports volumes cut to 3.8m tons in eight months

Lahore (Staff Reporter): During the first eight months of current fiscal year, cement exports registered a massive decline of 22.54pc as the volumes reduced from 5 million tons during July 2014-Feb 2015 to 3.8 million tons during July 2015- Feb 2016. Overall, the cement industry has posted a growth of 8.71pc during the first eight months of current fiscal year compared with same period during last fiscal year. The overall domestic and exports volumes were 2,981,904 tons and 467,287 tons respectively during Feb 2016 compared to 2,297,568 tons and 460,510 tons during Feb 2015. The domestic sales in north during Feb 16 were 2,428,597 tons compared to the domestic sales of 1,885,982 tons during same month last year.

showing growth of 28.77 percent.

The local sales in South during February 16 were 553,307 Tons compared to the local sales of 411,586 Tons during same month last year showing growth of 34.43 percent. Exports from southern units during February 16 declined by 18.9% to 169,809 Tons against 209,461 Tons done during February 15. Exports from north increased from 251,049 Tons during February 15 to 297,478 Tons during February 16 i.e. by 18.5 percent. Total despatches increased from 2.758 Million Tons during February 15 to 3.449 Million Tons during February 16 showing increase of 25.06 percent that has been the highest overall increase in a month during the first eight months of current fiscal.

Commercial banks asked to facilitate SME sector

Lahore (Staff Reporter): President Society Watch Khalid Mehmood on Sunday asked commercial banks to facilitate SME sector which is backbone of economy and engine of growth. SME sector is best suited to reduce unemployment by providing jobs but some policies are hindering their growth which must be revisited, he said. In a statement issued here today, he said that small and medium sized businesses should be supported on policy level and given preference in provision of credit. Khalid Mehmood said that uninterrupted flow of finances are important for survival and expansion of the SME sector without which economy cannot be revived.

The role of role of microfinance banks remains crucial to ensure unobstructed flow of financial resources to the SME sector which is engine of economic growth for country, he added.

He said that the current level of finance and access of SMEs to banking services remains unsatisfactory which calls for serious initiatives.

He said that SME sector represents over 90 per cent of all enterprises, employs some 75 per cent of the non-agricultural workforce and contributes Rs 86 billion to the GDP.

The sector that plays important role in poverty alleviation, and equitable resource distribution is being ignored by the government and commercial banks.

SMEs’ growth potential for employment, income generation, and poverty reduction remains mostly untapped in Pakistan. Only 2.5 million people are recorded as active borrowers of microfinance which is discouraging, he said.

Questioning policies which are hindering growth of SMEs, he said that there is a serious need for the small and medium banks to study successful microfinance banks in other countries in a bid to come up with effective and implementable ideas.

Authorities must take on the challenge of developing SME by providing an enabling environment, business development services and facilitate their growth agendas.

No future sans improved water strategy

Lahore (Staff Reporter): Chairman of the United International Group Mian Shahid on Sunday asked the government to declare water emergency to save the country and future generations. He called for a proper strategy and improved water management backed by extra allocations to ensure survival of the economy. Mian Shahid said that additional funds should be allocated for development of water resources otherwise our agriculture, livestock and industry will be damaged while country will become a desert. He said that almost ninety percent of water resources are being used for agriculture of which a sizeable quantity is lost due to outdated distribution system while 35 million acre foot water goes to the sea.

The level of ground water is dropping but farmers still use 100 per cent more water than Indian farmers while the ratio is 200 per cent higher as compare to China and 300 per cent higher to developed nations.

The wastage of water by farmers is a threat to our agriculture covering 21 percent of the GDP and absorbing 45 percent of the labour, he remarked.

He noted that Pakistan urgently need 200 small, medium and mega dams while it has only 61 out of which only two are mega dams. 

He said that 50 years back per capita water availability in country was 5650 cubic metre which is now below 1100 cubic meter which has left impact on power generation and prices of many commodities.

Country will need 277 maf of water and 100 increase in water storage capacity by 2025 otherwise it will face a catastrophe, he added.

Mian Shahid said that Pakistan will be left with no glacier by 2035 which would be a doomsday scenario for everyone.  

Share of agriculture in GDP drops to 21pc

Lahore (Staff Reporter): Patron Islamabad Chamber of Small Traders Shahid Rasheed Butt on Sunday said achievement of satisfactory growth rate is linked to the promotion of agricultural sector which has been ignored by almost all the government. Agriculture had 53 percent share in GDP until 1950 which dropped to 31pc in 1980 and now stands at 21pc which indicates that it is in the bottom of priority list, he said. Shahid Rasheed Butt said that dwindling share of agriculture which will go down with the collapse of cotton crop has stunned the economic growth. He said that GDP improvement without focusing on agriculture is a pipe dream and that feeding population exploding by 2pc per annum require urgent steps.

The veteran business leader said that 5.5 percent growth rate target for the current year is unattainable at best while government will soon have to revise it down like the targets of investment, exports and revenue.

Government has improved growth rate, forex reserves while workers remittances have been increased by six percent while it has failed to widen tax base and reform public sector enterprises.

He expressed concern over increasing dependence over loans and feared that country would not be able to service debt in five years and it will have to dance on the tunes of west to survive.

The solution of all ills lies in reforms which seems not on the priority list of the government, he lamented.

CPEC lifts trucks, buses sales by 46pc

LAHORE (Staff Reporter): Pakistan Automobile: 8MFY16 car sales reached at 149,311 units Lahore – The trucks and buses segment of Pakistan automobile sector has posted an increase of 40pc annually to reach at 3,803 units during eight months of the current fiscal year mainly due to surge in demand to CPEC and improving law & order situation in the country. According to the latest figures, local car assemblers registered 46 percent growth during 8MFY16 owing to rise in auto financing due to 42-year low interest rates, taxi scheme, improving law & order situation and overall improvement in economic situation in the country. During 8MFY16, local vehicle sales stood at 149,311 units versus 102,491 units in the same period last year.

Experts forecast local car sales to grow at 15 percent in FY16 to reach at 206,777 units. This lower growth is due to 1) completion of taxi scheme in Feb 2016 and 2) decline in Civic volumes in anticipation of new model, which is expected to hit the market in mid 2016.

Amongst individual companies, Pak Suzuki (PSMC) sales increased by 71 percent YoY to 91,608 units in 8MFY16 primarily due to Punjab Govt. Taxi Scheme. Volumes decreased by 16 percent YoY (-34 percent MoM) in Feb 2016 to 8,420 units primarily due to completion of Taxi Scheme.

Indus Motors (INDU) sold 41,723 units in 8MFY16 versus 34,375 units in 8MFY15.

In Feb 2016, INDU sales stood at 5,275 units, up 4 percent YoY due to high number of working days in the month of Feb. On MoM basis, sales decreased by 12 percent YoY due to early buying in the month of Jan owing to New-year registration phenomenon and less working days in Feb 2016 compared to Jan 2016.

It is important to note that delivery time for new corolla model is still hovering in the range of 2-4 months depending on the variant.

Honda Cars (HCAR) sold 15,793 units in 8MFY16 compared to 14,041 units in the same period last year. In Feb 2016, HCAR sold 2,168 units, down 3 percent YoY (-28 percent MoM). We believe that Honda City remained the major contributor in this growth.

Volumes of Honda Civic are expected to dry out in coming months in anticipation of new model launch in mid 2016.

Pakistan tractor segment posted a decline of 37 percent YoY during 8MFY16 to reach at 17,772 units. We attribute this decline to the delay in the launch of provincial tractor subsidy schemes. To recall, Punjab/Sindh Govt. in Budget FY16 announced subsidy of 25,000/29,000 tractors.

Millat tractors (MTL) and Al-Ghazi tractors (AGTL) both witnessed a decline in their volumes during 8MFY16. Industry sources revealed that farmers are waiting for the execution of announced subsidy schemes by Punjab and Sindh Govt. On the other hand, tractor manufacturers are requesting Govt. either to execute or shelve the announced scheme so that farmers resume their normal purchasing. 

MTL sold 10,984 units in 8MFY16 compared to 17,400 units in the same period last year. Sales of the company decreased by 26 percent YoY to 1,806 units in Feb 2016. However, it seems that farmers have resumed their normal purchasing as sales increased by 43 percent MoM.

During 8MFY16, AGTL witnessed a decline of 42 percent YoY in its sales to 6,139 units. Company sold 1,135 units in Feb 2016, down 24 percent YoY (+15 percent MoM).