Pakistan's cement industry witnesses significant challenges in FY23-24

Pakistan's cement industry witnesses significant challenges in FY23-24
14 June 2024

The cement industry in Pakistan grappled with a series of significant challenges in FY23-24, as reported by the Central Bank. The financial year is yet to complete hence the data represents 10FY23-24. The State Bank of Pakistan (SBP) unveiled the country’s economic survey 2023-24 on 11 June, shedding light on the state of its cement industry. 

The report revealed that the industry has been compelled by many challenges. The government’s fiscal limitations and restricted foreign aid have hampered rehabilitation efforts in flood-affected areas, leading to a general slowdown in the construction sector. Moreover, the global economic downturn has significantly curtailed cement exports to key destinations such as Sri Lanka and Bangladesh, grappling with foreign exchange crises. The industry has also been rocked by the steep rise in construction material prices.

Currently, Pakistan's cement industry exports its cement and clinker to Afghanistan, Sri Lanka, Maldives, Djibouti, Somalia, Tanzania, Kenya, Uganda, Mozambique, South Africa, Madagascar, Comoros, Seychelles, Iraq, Ethiopia, Qatar and the USA.

Cement prices in Pakistan rose by PKR10-15/bag (US$0.04-0.05) in just one day last week, according to Ary News. The price of a bag of cement has now risen by as much as PKR115 (US$0.41) in the last month, taking it to PKR1060 (US$3.80) in Sindh, the third-largest province in Pakistan, located in the southeast of the country. Meanwhile, prices in Punjab and Khyber Pathtunkhwa have risen even further, reaching PKR1260/bag. 

Northern region
Domestic consumption in the north was recorded at 26.178Mt during the first ten months of the current fiscal year, compared to 27.156Mt dispatched in the same month last year, thus showing a negative growth of 3.6 per cent. Exports from the north grew by 37.5 per cent and stood at 1.186Mt during the period, compared to 0.863Mt during the same period last year.

Southern region
Domestic consumption in the south decreased by 6.5 per cent and reached 5.553Mt during the first ten months of the current fiscal year, compared to 5.938Mt last year. Exports from the region increased by 74.9 per cent, from 2.593Mt  to 4.528Mt the previous year.

During July-April FY23-24, the cement industry grew by 2.4 per cent due to a massive export increase. Total cement dispatches stood at 37.446Mt against 36.551Mt last year. Domestic consumption contracted by 4.1 per cent, reaching 31.731Mt compared to 33.094Mt the previous year. Despite the challenges, there was a positive aspect with an uptick in export shipments, which surged by 65.4 per cent from 3.456Mt to 5.715Mt over the same period.

Published under Cement News