Our short research based paper summarizes the key points about what has been happening in the Pakistan cement industry and what future holds for it, if the growth continues the same way. Cement exports of the country continues to depict healthy growth and were recorded at the level of 913,000 tonnes during the month of November that triggered massive growth of 61 per cent on year on year (YoY) basis. While, cumulative exports for the five months period (Jul-Nov 2008) also witnessed a significant upsurge of 70 per cent at the level of 4.4 million tonnes versus 2.6 million tonnes in the same period of last year.
The low domestic cement demand in the country is due to the political uncertainty. He said cement exports from Pakistan would remain buoyant in coming future despite the world economic downturn and global financial crisis as Middle East has still huge demand of cement. Oil producing countries of the Middle East would require massive housing and construction works in years to come hence, a huge demand of cement is still present. Segregating the data, weight of sea based cement exports during the month was recorded at 66 per cent in overall cement exports if compared with 52 per cent in November 2007. Furthermore, cement exports to India during the month were recorded at 67,000 tonnes, which is lower when compared with the previous monthly average of 100,000 tonnes.
However, following the recent terror attacks in Mumbai, the Indian cement industry is now sensing an opportunity to demand a curb on Pakistan cement imports. In this regard, Indian cement industry is now approaching Indian government to review its trade talks with Pakistan with respect to cement, which could probably lead to a decline in Pakistan cement exports to India.
According to the provisional cement data, overall industry dispatches are likely to witness a decline of 3 per cent during the month of Nov 2008 at 2.5 million tonnes versus the same month last year.
On cumulative basis, cement dispatches during the first five months of FY09 (Jul-Nov 2008) is estimated to depict 2 per cent nominal increase at 12.3 million tonnes as compared to 12 million tonnes during the same period of last year.
The rise in cumulative cement dispatches is solely attributable to rising export volumes as domestic demand has remained depressed. Increasing regional cement demand from countries like Afghanistan, Middle East and African countries fuelled the export demand growth during the period. Utilisation level dropped to 80 per cent of the capacity In November 2008, cement plants of the country operated at 80 per cent capacity utilisation level as compared to 83 per cent in the same month of last year. While, overall utilisation levels for Jul-Nov 2008 recorded at 79 per cent as against 78 per cent in the corresponding period of previous year.
Local demand recovered in Nov on MoM basis: Local demand is likely to record higher volumetric sales as compared to the previous month. The local cement dispatches registered an increase of 4 per cent at 1.6 million tonnes during November 2008 versus 1.5 million tonnes in the previous month. On YoY basis this represents a heavy decline of 21 per cent.
In aggregate, the domestic cement dispatches for 5MFY09 were recorded at 7.9 million tonnes, depicting a decline of 16 per cent YoY. Segregating the data, Northern cement manufacturers led local dispatches with 1.3 million tonnes as compared to 232,000 tonnes for the southern zone during the period under review.
Cement industry is indeed a highly important segment of industrial sector that plays a pivotal role in the socio-economic development. Though the cement industry in...