Pakistan: FY12 cement sales helped by local dispatches

FY12 has been witnessing a drop in Pakistan’s export sales, whereas domestic cement dispatches have been rising.

The latest numbers released by the All Pakistan Cement Manufacturers Association (APCMA) up until January FY12 show a continuation of this trend.

Local dispatches improved by 7% YoY from 12Mt in 7MFY11, while during January 2012 alone, local deliveries improved by nearly 9% to 1.9Mt versus January 2011.

While the surge in local sales was witnessed in both the northern and southern regions, the pace of growth was markedly higher in the southern region.

Industry sources claim that the surge in domestic sales was led by an increase in house construction in both rural and urban areas.

The decline in exports was primarily due to a disincentive for local players to sell to markets abroad where prices were much lower.

Yet, exports to Afghanistan and India improved during 7MFY12, with reconstruction work in war-ridden Afghanistan explaining growth in the former, and the latter explained by a renewal of Bureau of Indian Standards (BIS) certificates for cement manufacturers in the latter half of next year. While exports via sea are likely to stay subdued going-forward, an increase in sales to India may be seen thanks to the likelihood of road routes opening up to India over the next month or two.

At the same time, exports to Afghanistan are also expected to increase further once weather conditions become favourable.?? As far as local dispatches are concerned, reconstruction work after the Sindh floods and an increase in house construction is likely to keep up domestic demand.