Pakistan cement records rising September dispatches

All Pakistan Cement Manufacturer Association (APCMA) released the highest local and overseas dispatch figures for September 2020. Total dispatches by Pakistani cement producers during September 2020 reached 5.213Mt against dispatches of 4.273Mt in September 2019. 

Experts attribute September’s pick-up in cement dispatches to post-Eid break and monsoon rains last month. The export to Bangladesh and Sri Lanka also increased during this period.

According to the breakdown, the domestic sales of cement in September 2020 increased by 17.7 per cent to 4.089Mt from 3.475Mt in September 2019, while exports registered an increase of 41 per cent, rising to 1.124Mt from 0.797Mt in the same month last year.

In the north domestic cement dispatches increased by 16.3 per cent to 3.523Mt during September 2020 from 3.029Mt in September 2019. Exports from the north increased by 9.3 per cent to 0.287Mt in September 2020 from 0.263Mt in September 2019. 

Growth in the southern region saw domestic cement dispatches rise by 26.4 per cent to 565,236t from 445,629t in September 2019. Exports from the south continued to expand and increased by 56.5 per cent to 837,033t in September this year from 534,751t in September 2019. 

Total cement dispatches between July-September 2020 increased by 21.9 per cent to 13.573Mt from 11.136Mt in July-September 2019. Domestic deliveries registered a healthy increase of 18.8 per cent, rising from 9.12Mt to 10.837Mt. Exports also showed encouraging growth, advancing by 35.7 per cent from 2.016Mt to 2.735Mt during this period. Significant production growth comes from Lucky Cement (57 per cent), Bestway Cement (22 per cent), DG Khan (eight per cent), Power Cement (545 per cent), Fauji Cement (17 per cent) and Kohat Cement (21 per cent).

Outlook
Spectrum Research expects the local cement demand to pick up going forward as construction activities already accelerated following the COVID-19 lockdown. The momentum is likely to continue in the next quarter given the government policy to support the construction sector. The start of the housing scheme and ongoing construction of dams is expected to be a trigger for cement demand.

Moreover, to provide liquidity, SBP has instructed banks to take at least five per cent exposure in private sector credit by December 2020. Easing monetary policy would continue to support companies' bottom line in the next quarter.