Local cement sales fall on construction lull

Published April 3, 2024
Exports rose 68pc in July-March 2023-24 on robust shipments to Africa.—Reuters
Exports rose 68pc in July-March 2023-24 on robust shipments to Africa.—Reuters

KARACHI: Construction activities remained slow as local cement despatches fell year-on-year by 0.62 per cent in March and 3.81pc in 9MFY24, respectively.

Local sales eased to 3.336 million tonnes from 3.357m tonnes in March 2023, showing a decline of 0.62pc. Export despatches, however, increased by 38pc to 605,142 tonnes from 438,433 tonnes a year ago.

As a result, the overall cement despatches (local and export) rose 3.85pc in March to 3.941m tonnes versus 3.795m tonnes during the same month of 2023.

According to the data released by the All Pakistan Cement Manufacturers Association, domestic despatches during 9MFY24 were 29.401m tonnes as against 30.564m tonnes last year, showing a reduction of 3.81pc.

Export despatches during 9MFY24 rose by a healthy 68pc as the volumes increased to 5.101m tonnes from 3.036m tonnes in the same period last year.

During July-March FY24, total cement despatches (domestic and exports) were 34.502m tonnes, showing a rise of 2.68pc over 33.6m tonnes in the corresponding period last year.

The APCMA spokesman said the industry hopes the new government will address its concerns. Cement units have increased their capacities in anticipation of higher construction activities, but operating at full capacity remains a distant dream.

Fahad Hussain Khan of Topline Securities attributed low cement sales to a slowdown in construction activities due to the higher cost of inputs, the high base effect of last year as cement despatches were up due to flood-related construction activities, and the implementation of axle load, as companies were facing issues in transporting cement.

He said export growth is mainly due to Lucky Cement, which recently secured orders mostly from African countries.

The average retail price in March increased by Rs10 per bag to Rs1,205 per 50 kg bag in the south, while it declined by Rs6 per bag to Rs1,239 per bag in the North, according to the official data.

Mr Fahad anticipated local sales to remain flat year-on-year at 40m tonnes, down from an earlier estimate of 5pc growth in FY24, while export sales would continue their momentum. Total cement despatches may clock in at 47m tonnes, up 5pc in FY24.

Published in Dawn, April 3rd, 2024

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