Cement dispatches increased 4% to 25.65 million tons in the first nine months (Jul-Mar) of fiscal year 2015 (9MFY15) compared to 24.78 million tons in the same period previous year, according to data released by the All Pakistan Cement Manufacturers Association (APCMA).
In March 2015, local cement dispatches jumped 5% year on year (YoY) to 2.44 million tons, against 2.32 million in March 2014. However, exports in March 2015 significantly dropped by 30% YoY to 0.44 million tons in comparison to 0.63 million tons in same period last year.
More growth was observed in local dispatches that increased by 8% year on year and settled at 20.22 million tons in 9MFY15 as compared to 18.76 million tons in same period last year.
However, cement exports plunged by 10% YoY and reached at 5.43 million tons in 9MFY15 from 6.02 million tons in 9MFY14.
A regional level analysis illustrated that north recorded a plunge of 6% YoY in March 2015 to 2.2 million tons while south depicted an increase of 12% to 0.65 million tons.
The north region exports in March 2015 massively declined by 40% YoY to 0.26 million tons compared to 0.44 million tons in March 2014. The southern area exports in March 2015 also plunged by 8% YoY to 0.17 million tons, compared to 0.19 million tons in March 2014.
The improvement in macroeconomic environment in the country is likely to fuel local demand of cement even further, InvestCap Research said on Tuesday.
Currently, the private sector housing schemes are the major driving factor in cement local demand. In addition, the government has so far released over Rs271 billion under the Public Sector Development Programme (PSDP) against the total allocation target of Rs525 billion for FY15.
It is anticipated that government would most likely miss its fiscal year target for PSDP as Rs254 billion remains unutilised. The government is likely to propose an increase in PSDP target for next fiscal year by 10% to Rs580 billion.
“We are still bullish on the cement sector because of lower coal prices and stable cement prices in the local market,” the report added.
