Cements sales up 9% YoY to 38.8m tonnes | Pakistan Today

Cements sales up 9% YoY to 38.8m tonnes

The cement sales are likely to show an excellent growth of around 9 per cent year on year (verses a mere 3 per cent growth seen during FY12-15) to 38.8 million tonnes during fiscal year 2015-16 owing to increase in the number of private housing schemes and execution of development work on various projects of the federal and provincial governments.

Local dispatches during 2015-16 are likely to register strong growth of around 16 per cent year on year to 33 million tonnes owing to rise in construction activities. As per Pakistan Economic Survey 2015-16, construction sector posted excellent growth of 13 per cent year on year during 2015-16 as compared to 4 per cent average growth seen during the last 4 years (FY2012-2015). This was on the back of economic recovery and booming real estate sector.

Exports in 2015-16 are expected to peg at around 5.9 million tonnes, down 18 per cent YoY because of lower dispatches to Afghanistan and South African markets.

Total sale during Jun 2016 is likely to remain almost flat at 3.3 million tonnes YoY (down 8 per cent MoM) with local sales at 2.9 million tonnes (up 5 per cent YoY, down 4 per cent MoM) and exports at 0.4 million tonnes (down 28 per cent YoY, down 29 per cent MoM). Local sales came off MoM on the back of revised quota arrangement among cement manufacturers as a result of increase in cement prices, an analyst of Topline securities said. The cement producers recently raised cement prices by around 7 per cent (Rs 35/bag) to pass on the tax in the budget 2016-17 on to the consumers.

The presence of cheap Iranian cement in Africa and capacity additions in the region are fueling competition. As a result, exports are likely to come off on monthly basis.

As per Pakistan Bureau of Statistics, retail cement prices during June 2016 were in the range of Rs 492-556/bag in the North and Rs 538-553/bag in the South region with an average of Rs 531/bag across Pakistan.

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