Pakistan: cement outlook is positive

Pakistan: cement outlook is positive
Published: 12 June 2013

Tagged Under: Pakistan 

Pakistan’s cement industry saw good performance during 9M FY2013. Local dispatches touched 20.74Mt, total exports were recorded at 6.923Mt and capacity utilisation 74.15 per cent. Pakistan cement was exported to Afghanistan, South Africa, Iraq, India, Sri Lanka, Tanzania, Djibouti, Mozambique, Sudan and Kenya.

According the Pakistan Economic Survey 2011-12, released by the Ministry of Finance on 11 June, the cement industry played a vital role in the manufacturing sector in Pakistan during the current FY12-13. In the non-metallic mineral product segment, cement managed to grow by 6.08 per cent, driven by the timely release of public sector development funds during the period, amounting to PKR183.2bn (US$1.859bn), which stimulated construction activity.

While the industry faced a difficult time in 2010-11 due to heavy flooding in 2010, in 2011-12 local cement prices have improved in both subsequent fiscal years, supporting recovery of cement company margins.

The cement sector also performed well  during July-April FY13 and registered a growth of 20.1 per cent with a contribution of US$469m to the overall exports. The rise in cement export was led by a strong demand from Africa and Afghanistan.

The economic survey stated that owing to improving cement prices this year, the outlook for most cement players is positive. Exports will continue to be a challenge, though devaluation of the rupee and efforts by local manufacturers to increase prices in Afghanistan will support volumes. Local cement dispatches are also expected to go up due to an improvement in PSDP expenditures this year and an election-led boost in infrastructural spending.

There are 25 cement factories in Pakistan with a total  cement production capacity of 44.77Mta. Activities are concentrated into two main geographic zones in the North (85 per cent) and South (15 per cent).