Cement sales rise 7% on higher local demand

Manufacturers shifted focus to domestic market due to better prices.

KARACHI: Cement sales rose seven per cent to 5.2 million tons on the back of higher demand in the first two months of fiscal 2012.

The growth in overall dispatches is attributed to a 14% upsurge in local sales. Local sales reached 3.68 million tons during July to August 2011 compared with 3.24 million tons in the same period last year, according to data released by All Pakistan Cement Manufacturers Association.

This is an unexpected surge in sales as they historically tend to pick up in the fifth month of the financial year, said Summit Capital analyst Sarfraz Abbasi. Local sales have shown strong growth as manufacturers shifted their focus to the local market due to better selling prices, according to analysts.

Meanwhile, export sales fell by 7% to 1.55 million tons on a yearly basis owing to economic slowdown, lower construction activities and 36% decline in exports through sea.

However, exports to Afghanistan and India registered substantial increase of 18% and 68%, respectively, Abbasi said, adding that 17 local companies out of 19 have licence to export cement to India.

As far as monthly performance of the cement industry is concerned, sales fell 18 per cent to 2.36 million tons in August owing to rains in Sindh and other parts of the country which have disrupted construction and other business activities, said Abbasi.

Promising times seem to be ahead for the industry as selling price and construction activity are both expected to go up in the short-term, he said.

Cement prices have increased 32% on a yearly basis to an average of Rs380-385 per bag in the north while they stand at Rs395-400 per bag in the south.

Around 58% increase in the public sector development programme this year is also expected to give a boost to the cement industry, said Abbasi.

Published in The Express Tribune, September 22^nd,  2011.