Pakistan's two leading research houses, AHL Research and Topline Securities, while taking account of provisional cement data of July 2022, the first month of the FY22-23, depict a considerable decline in local/export sales due to the Eid holidays, monsoon rains across the country, and a fall in land and sea routes dispatches. However, the All Pakistan Cement Manufacturer Association (APCMA) is yet to release official data in the first week of next month.
According to a report by AHL Research, total sales saw a decline of 54 per cent YoY to 1.79Mt, whereby domestic dispatches shrunk by 52 per cent YoY to 1.64Mt and exports 67 per cent to 0.15Mt. Analysts at AHL Research reported a decline in the north-based exports to Afghanistan by 54 per cent YoY to 0.06Mt coupled with a 72 per cent YoY dip in south-based exports to 0.09Mt.
As a result, capacity utilisation of the industry dropped to just 31 per cent in July 2022 from 92 per cent witnessed the previous month and 77 per cent in FY21-22. Capacity utilisation of the north region settled at 33 per cent vis-à-vis 98 per cent in June 2022 and 77 per cent in FY21-22, whereas the southern region posted a capacity utilisation of 25 per cent compared to 72 per cent in the prior month and 76 per cent in FY21-22.
Topline Securities believed that Pakistan’s cement sales were down due to economic slowdown and rising construction costs. Analysts remarked that with rising interest rates, expected slowdown in economic growth and contained Public Sector Development Program (PSDP), cement dispatches would remain under pressure in FY22-23.
