Pakistan Records Highest-Ever Cement Sales in Over a Year

Cement sales have soared by two percent year-on-year (YoY) to 5.30 million tons in June 2022 from 5.21 million recorded in June 2021, whereas domestic dispatches have gone up by nine percent YoY to 5.07 million tons.

According to provisional data released by the All Pakistan Cement Manufacturers Association (APCMA), the month-on-month (MoM) offtake growth appears robust, displaying a 60 percent surge in June 2022 over 3.15 million tons recorded in May, led by a solid 61 percent escalation in domestic dispatches amid pent-up demand since the Eid holidays last month that had wiped off almost a week of working days.

Meanwhile, exports shrunk by a massive 58 percent YoY during June 2022 to 0.23 million tons due to a decline in the north-based exports to Afghanistan by 51 percent YoY to 0.01 million tons, coupled with the 62 percent YoY dip in the south-based exports to 0.13 million tons.

Exports showed improvement on an MoM basis, going up by 32 percent, with a 36 percent MoM growth seen in those of the north, and a 29 percent MoM uptick in the south-based exports. This took the FY22 dispatches to 52.93 million tons (down by eight percent YoY), given a one percent YoY cut in domestic offtake to 47.73 million tons after the government rolled back the incentives offered during the initial outbreak of COVID-19. The ripple effect was massive as interest rates went up and cement prices rose drastically as manufacturers passed on costs, primarily higher coal prices in the backdrop of a commodity super cycle, the depreciation of the rupee, and the higher energy tariff, which together with low public sector-led demand, could not aid the cement demand this year.

Exports have continued to underperform, with a 44 percent YoY decline during FY22 to 5.20 million tons observed after a slow down in sea-based exports to Bangladesh and Sri Lanka, together with liquidity issues in the neighboring Afghani market eroding exports from Pakistan.

Further dissection revealed that deterioration in the north during FY22 arrived at six percent YoY to 40.43 million tons with local offtake compressing by three percent YoY to 39.52 million tons amid weak demand ensuing from construction activity and government projects, while exports dwindled by a significant 64 percent YoY to 0.91 million tons.

On the other hand, the south-based dispatches underwent a reduction of 12 percent YoY owing to a 36 percent retardation in exports. However, the domestic demand in the local south market remained shielded, growing by nine percent YoY in FY22 to 8.22 million tons, as many housing projects remained on track.

Volumetric Decline Across the Board in FY22

On a YoY basis, companies that managed to observe growth during June 2022 include Pioneer Cement Limited (PIOC) with 371,000 tons in volume and 15 percent YoY growth, Kohat Cement Company Limited (KOHC) at 402,000 tons with 14 percent YoY growth, Gharibwal Cement Limited (GWLC) at 178,000 tons and 11 percent YoY growth, Maple Leaf Cement Factory Limited (MLCF) at 483,000 tons with 10 percent YoY growth, Bestway Cement Limited (BWCL) at 826,000 tons with four percent YoY growth, and Cherat Cement Company Limited (CHCC) at 385,000 tons with one percent YoY growth.

Conversely, the key laggards were Attock Cement (ACPL) at 195,000 tons (-17 percent YoY), Power Cement (POWER) at 164,000 tons (-13 percent YoY), Fauji Cement Company Limited (FCCL) at 340,000 tons (-6 percent YoY), DG Khan Cement Company Limited (DGKC) at 562,000 tons (-3 percent YoY), and Lucky Cement (LUCK) at 875,000 tons (-2 percent YoY).

On an FY22 basis, all companies displayed a volumetric decline in which the top laggards were ACPL with 2.28 million tons (-31 percent YoY), POWER with 1.93 million tons (-18 percent YoY), DGKC with 6.51 million tons (-10 percent YoY), CHCC with 3.57 million tons (-10 percent YoY), BWCL with 7.80 million tons (-10 percent YoY), and LUCK with 9.07 million tons (-9 percent YoY).



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