Pakistan's State Bank acknowledges cement growth

Pakistan's State Bank has confirmed that cement industry is performing well and a considerable amount of capacity is due to come ons-stream in a couple of years. Manufacturers have been investing aggressively in capacity expansions (by adding about 60 per cent additional operational capacity) over the past few years, in anticipation of strong domestic demand.

The cement industry is driven by steel and domestic infrastructure investments, by both public and private backers, said the bank in its second quarterly 2017-18 report. The industry is also benefitting from economies of scale due to higher capacity utilisation.

Contrary to steel, however, the increasing demand has largely been met by indigenous sources, as the industry has the required raw materials and capacity to cater to the growing needs of the economy. As a result, domestic sales posted an considerable YoY growth of 17.4 per cent in 1HFY18, compared to 11.1 per cent in 1HFY17, with capacity utilisation reaching 95 per cent.

However, cement exports fell by 17.3 per cent YoY.