Cement sales up 16pc in October on infrastructure development

LAHORE: Cement sales rose 15.88 percent month-on-month in October due to a rise in infrastructure development in Pakistan; although its exports fell almost two percent in the same month on a declining share in the Afghanistan’s market, industry data showed on Monday. 

The All Pakistan Cement Manufacturers Association (APCMA) data showed that domestic sales stood at 3.008 million tons in October, while exports were recorded at 0.518 million tons. Total cement dispatches stood at 3.527 million tons, depicting a growth of 12.87 percent month-on-month (MoM). 

An association’s spokesperson said the industry’s capacity utilisation logged at more than 92 percent in October.

In October, exports to Afghanistan decreased 23.4 percent year-on-year (YoY) to 0.193 million tons. Exports to India increased 27 percent YoY to 0.110 million tons in the same month. 

Despite Pakistan-India tension, the growth was surprising. The spokesperson, however, said the uptrend might not continue given the unabated border skirmishes.

Cement exports to India are mainly through Wagah border and southern coast of India.

The data showed that cement sales grew 11.26 percent in the first four months (July-Oct) of the 2015/16 fiscal year. Exports also increased 9.57 percent in the same period. 

In July-Oct, exports to Afghanistan slid 11.74 percent, while those to India climbed 101.88 percent. 

The industry official expressed concern over a sharp rise in coal prices, impacting the cost of production. Coal price, which stood at $54/ton in May, increased to $105/ton. 

Manufacturers urged the government to take measures to boost the investment in real estate sector and housing construction. 

Currently, the cement industry is mostly depending on infrastructure development projects. 

“A sustained growth in housing construction is essential to absorb the additional capacities that would be operational in the next two years,” the official said. 

Insight Securities, in one report, said the local cement industry unveiled 23 million tons of expansion plans with around $2.5 billion investment.

Alone Lucky Cement, the country’s leading cement producer, announced to raise its production capacity by 1.25 million tons. A Chinese firm is also mulling to entering the market through a possible acquisition, indicating a jump in output.

The officials said local cement makers are planning an expansion to retain the market share. 

The $46-billion China-Pakistan Economic Corridor projects, comprising a wide range of infrastructure development, gave a rise to construction activities.

The growth in housing apartment constructions around the country also increased the cement intakes.