KARACHI, May 3: Cement sales during the month of April touched an all-time high level of over 1.6 million tons, including 186,278 tons of exports. After some patchy performance in earlier years, the cement industry appears to be now rolling in good times. Industry sources said that for the 10-month period (July-April 2004-05), cement sales had posted its record best sales of 13.7 million tons.

And it was exports that took a surprisingly huge jump during April. A lot has been said about sales to Afghanistan, but the Pakistani cement producers appear to have found a new more lucrative destination: Iraq. Pioneer Cement exported 35,174 tons of cement to Afghanistan and Iraq during April, leading the rest of the industry. Of this, exports to Iraq stood at 16,900 tons, which was about half the cement exports of 33,120 tons by the industry to that country. Up until March this year, Pakistani cement had found its way mainly to a single country, Afghanistan, where the industry had managed to sell 1.09 million tons, averaging 0.12 million tons per month. Overseas sales to Iraq until now, was almost insignificant.

Cement companies are optimistic about exports growth and increase in prices. According to industry sources, exports to Afghanistan, which used to fetch $32 per ton, is now selling at $36 per ton FoB, reflecting improved pricing of $4 per ton. Iraq is even a more greener pasture with the FoB price rising from $47 to $53 per ton, an increase of $6 a ton. An executive of a leading cement company said that Pakistan had the potential for a big boost in exports, provided ‘bulk loading facility’ was provided at the Port. He contended that India had been able to capture a big share in the Middle Eastern markets because it had the bulk loading facility at the Mumbai Sea Port.

In the domestic market D.G.Khan Cement was the industry leader with its April despatches at 0.14 million tons and 10-months’ aggregate sales at 1.22 million tons. Maple Leaf followed with total sales at 1.11 million tons, including 0.12 million tons last month. Lucky Cement took the third slot with sales of 0.11 million tons in April and year-to-date sales at 0.93 million tons.

Most of the companies operated at over 100 per cent capacity last month, with all of the output having been despatched. Housing and industrial constructions were the biggest end users, as is evident in sprouting of new buildings in cities and expansions in infrastructure build up in industrial areas.

The big question is whether the cement industry could continue to manage the concrete progress over the next few years? Analysts say that for the last three years, including the current one, cement sector sales stood at double digit (15 to 20 per cent) growth. Industry is relying on continuation of demand growth for another three years, due to larger allocation of development expenditure, increase in housing loans and rise in per capita income. Some analysts suggest a figure of Rs260 billion for FY’05-06 that the government was envisaged to allocate for the forthcoming fiscal year, compared to Rs202 billion that were allocated in the current budget. But as large expansions come on stream, the industry outlook beyond FY’09 was difficult to foresee.