Pakistan cement exports continue mixed trend in 11MFY22-23

Pakistan cement exports continue mixed trend in 11MFY22-23
21 June 2023

The cement industry in Pakistan continued to experience a mixed picture in export revenue during the first 11 months of the current financial year, which runs from July 2022 to June 2023. While the income earned in US dollars decreased, the Pakistani rupee improved due to the currency's devaluation.

BMA Capital, in a research report on the cement industry, commented that the prospect of exports serving as a viable solution for new cement capacities appears reasonable. Analysts anticipate that cement exports will grow by five per cent YoY in FY24 and adequately support utilisation levels (53 per cent in FY24 estimated) in the wake of depressed local dispatches. It expects flattish local cement sales in FY24 due to higher cost of production, restricted government spending and poor purchasing power.

Experts believe the PKR depreciating by over 40 per cent a financial year till date (FYTD) and normalising freight charges will further support export volumes. Economic distress in Sri Lanka and restricted market access to India have pushed local manufacturers to look for alternate exporting destinations. DG Khan Cement, for example, has initiated exports to the US and is also exploring options in South America and Europe. Furthermore, stability in Afghanistan is also a welcome sign.

Based on the latest Federal Bureau of Statistics (FBS) data, the cement industry's export earnings in 11MFY22-23 (July – May) amounted to US$168.58m, with 3.71Mt of cement and clinker exported worldwide. This is down from the previous year's earnings of US$211.19m and 5.47Mt exports, indicating a decline of 20.18 per cent in value and 32.17 per cent in volumes. FBS also noted that in local currency terms, export earnings experienced 13.73 per cent YoY growth, amounting to PKR41.71bn. This was possible due to a fall in local currency value against the dollar, ultimately benefiting exports of cement in PKR terms.

During May 2023 alone, export revenues increased to US$18.09m on shipments of 465,264t compared to US$15.04m on 332,850t in April 2023. This translates to a 20.24 per cent MoM augmentation in value terms and 39.78 per cent in volume. In addition, exports rose by 145.87 per cent YoY in value and 207.85 per cent in quantity compared to export figures of US$7.360m on 151,131t in May 2022.

Pakistan has been exporting clinker and cement to Bangladesh, Sri Lanka, Afghanistan, Madagascar, South Africa, Tanzania, and the USA.

Published under Cement News