Pakistani domestic sales down, exports perform well

Pakistani domestic sales down, exports perform well
Published: 03 January 2009

Pakistani cement works operated at 59 per cent capacity in December 2008 as compared to 61 per cent in December 2007, the lowest monthly utilisation recorded after February 2004, at 55 per cent.

However, total utilisation levels for the first half of fiscal year 2008-09 (1HFY08-09) was recorded at 74 per cent against 75 per cent in the corresponding period of previous year, First Capital Research reported on Wednesday.

The cement sector concluded the last month of 2008 with continued poor domestic sales performance by observing 13 per cent year-on-year (YoY) decline at 1.29Mt.

As per available interim cement data overall industry dispatches are likely to remain flat at 1.9Mt during December 2008 versus the same month last year.

In total, cement sales during the first half of FY08-09, from July to December 2008 are likely to illustrate a small three per cent increase at 14Mt compared to 13.9Mt during the same period of last year. Despite frail domestic market, the overall increase in cement dispatches is exclusively attributable to higher export volumes. In summary, the domestic cement dispatches for 1HFY09 were recorded at 9.23Mt a decline of 16 per cent YoY.

Domestic cement demand is likely to remain under pressure in 2009 as the cement utilisation would continue to face difficulties as high interest rates and cuts in infrastructure spending would continue to obstruct construction activity of the country. However, cement exports should continue to perform well, already having achieved 607,000t of shipments in December.