Skip to content

Pakistan Cement News

Pakistan Cement News

High cost impacts Pakistan cement export in 3MFY22 

According to Intermarket Securities Ltd, in 1QFY22-23 (July-September 2022) overall cement industry utilisation stood at 56 per cent, compared to 72 per cent in the same period last year. The fall in capacity utilisation was also partially reflected in exports. The overall increase in manufacturing cost has discouraged cement companies in the South from exporting cement/clinker at current prices, which have not moved in tandem with cost. In addition, higher international coal prices coupled with recent floods have made the export market unattractive for the industry.
Pakistan’s cement industry earned US$46.35m by dispatching 941,532t of cement and clinker overseas in the 1QFY22-23, compared to US$55.20m from 1.555Mt of exports in the year-ago period, says data released by the Pakistan Bureau of Statics (PBS). Therefore, the sector saw a YoY reduction of 16 per cent in dollar terms and 39.5 per cent in volume in the 1QFY22-23. However, exports valued in Pakistani rupees rose by 15 per cent to PKR10.51bn during this period.
On a positive note, in September 2022 alone, export revenues saw an increase of 151.4 per cent MoM to US$29.13m on the shipment of 612,404t, compared to US$11.55m from 223,987t of exports in August 2022. The quantity increased by 173.4 per cent during this period.
However, if compared with September 2021 (US$33.81m from 1.020Mt), the trend was revered as an export drop by 13.8 per cent in cost and volumes by 40 per cent.
Meanwhile, on an encouraging note, Karachi Port Trust (KPT) adds that it coordinates closely with exporters to enhance the country’s cement exports and extend all possible facilities per their requirements. In this regard, KPT is paying special attention to cement exporters, raising Pakistan’s cement exports to as far as the USA. During the last quarter of the FY21-22, KPT handled 60,109t of cement. In the 1QFY22-23, KPT dealt with the export of 125,660t of cement, a 48 per cent increase from the previous quarter. Taking into account the orders in the pipeline, these volumes are expected to grow further.
Pakistan has been exporting clinker or cement to Bangladesh, Sri Lanka, Afghanistan, Madagascar, South Africa, Tanzania, USA and India.

Lucky Cement To Buyback 10 Million Shares

Lucky Cement plans to buy back its 10 million shares from shareholders at the face value of Rs. 10 per share.

According to the firm’s financial results, the board of directors has directed the management of the company to carry out the drive of purchasing back its shares from different shareholders. The reason for this transaction is said to be the cancellation of shares.

The purchase back of the shares will have a positive effect on the future financial position of the company including the breakup values of the company’s shares and earnings per share.

It will also provide an opportunity for exit to those members who wish to liquidate their investment fully or partially.

The buyback of shares will continue from the period of September 29 to December 19, this year.

The company will purchase its shares back at the spot or current share price prevailing during the said period in accordance with PSX’s law.

Pakistan’s cement and clinker exports decline

Pakistan’s cement and clinker exports have decreased in the first seven months of the FY21-22. According to local analysts, historically, when domestic demand is booming, exports take a backseat, and when the domestic market is slowing down, exports contribute a critical share in total sales. It makes more economic sense to sell domestically where prices are more desirable and less competitive. The Indian supply has not been restored to date, and there is no momentum in dispatches to Kabul.

The Pakistan cement industry earned US$160.926m in export revenue by dispatching 4.315Mt of cement and clinker overseas in the 7MFY21-22 (July 2021-January 2022), compared to US$163.67m from 4.93Mt of exports in the year-ago period. As a result, the sector saw a nominal slide of 1.7 per cent in dollar terms but reported a double-digit decline of 12.5 per cent in volume during the export period. However, exports valued in Pakistani rupees saw a growth of 3.1 per cent to PKR27.58bn (US$156.4m) during this period.

Pakistan has been exporting clinker/cement to Bangladesh, Sri Lanka, Afghanistan, Madagascar, South Africa, Tanzania and India.

In Jan 2022 alone, export revenues decreased 44 per cent MoM to US$17.15m on the shipment of 393,347t, compared to US$27.77m from 702,698t of exports in December 2021.

However, when compared with January 2021 earnings of US$20.74m from 607,640t, this represented a drop of 17.3 per cent and 35.3 per cent YoY in value and quantity, respectively.

Pakistan: January cement sales down 16.58pc

Pakistan Cement dispatches declined 16.58 percent to 3.95 million tonnes in January 2022 against 4.73 million tonnes in the corresponding period last fiscal, mainly due to harsh weather in hilly areas that affected construction and transportation activities.

According to the data released by All Pakistan Cement Manufacturers Association (APCMA) on Wednesday, local cement sales in January 2022 were 3.4 million tonnes compared to 4.04 million tonnes in January 2021, down 15.87 percent. Exports suffered a massive decline of 20.71 percent as volumes reduced from 694,934 tonnes in January 2021 to 551,006 tons in January 2022.

In January 2022, cement factories based up north sold 2.707 million tonnes in the domestic markets, showing a reduction of 18.29 percent against 3.313 million tonnes in January 2021. South-based units dispatched 693,453 tonnes of cement in local markets during January 2022 that was 4.82 percent less compared to 728,568 tonnes sold in January 2021.

Exports from the north-based units nosedived 94.12 percent, as quantities reduced from 233,404 tonnes in January 2021 to 13,727 tonnes in January 2022. However, the exports from down south increased 16.41 percent to 537,279 tonnes in January 2022 against 461,530 tonnes during the same month last year. During the first seven months of the current fiscal year, total cement dispatches (domestic and exports) were 31.4 million tonnes that calculates to 5.89 percent lower than 33.37 million tonnes dispatched during the corresponding period of the last fiscal year. Further analysis indicated that domestic uptake of the commodity reduced by 0.69 percent to 27.465 million tonnes from 27.657 million tonnes during July-January 2021, whereas exports during the same period declined by 31.04 percent to 3.94 million tonnes from 5.71 million tonnes during July-January 2021.

North-based mills dispatched 22.87 million tonnes of cement domestically during the first seven months of the current fiscal, showing a reduction of 2.85 percent compared to 23.54 million tonnes during July-January 2021. Exports from the north declined by 61.39 percent to 557,615 tonnes during July-January 2022 compared with 1.444 million tonnes exported during the same period last year.

Domestic dispatches by the south-based units during July-January 2022 were 4.59 million tonnes, showing an increase of 11.67 percent over 4.115 million tonnes of cement dispatched during the same period of the last fiscal year. There was however a substantial decline of around 20.78 percent in exports from the south zone, as the volumes reduced to 3.384 million tonnes in the first seven months of the current fiscal year from 4.272 million tonnes in the corresponding period last fiscal.

A spokesman of the APCMA said the decline in cement dispatches was hitting the industry badly, while the industry was already under pressure due to sharp increase in the cost of production that includes international coal prices, high power tariff and transportation cost. He said that slowdown in the construction activities for public sector development projects amid unfavourable weather conditions were some of the major causes of lower cement consumption.

Pakistan sees exports surge in November

Pakistan’s cement and clinker exports has reported mixed results between July 2021 and November 2021. According to a research house, exports observed a negative trend on a cumulative basis driven mainly by the political crisis in Afghanistan, as exports from the north reportedly remained disturbed. Elsewhere, exports from southern plants posted nominal growth.

The industry earned US$115.99m in export revenue by dispatching 3.20Mt of cement and clinker overseas in the 5MFY21-22 (1 July-31 November 2021), compared to US$123.67m from 3.73Mt of exports in the year-ago period. Therefore, seeing a decline of 6.2 per cent and 14.6 per cent in dollar terms and quantity, respectively.

However, in November 2021, export revenues surprisingly increased 393.1 per cent MoM to US$50.54m on the shipment of 1.40Mt (+462.7 per cent MoM), compared to US$10.24m from 248,833t of exports in October.

Production in the 4MFY21-22
During July-October 2021, Pakistan’s cement production decreased by 2.7 per cent YoY to 15.982Mt from 16.433Mt in the year-ago period. In October 2021 alone, production fell 15.6 per cent to 4.479Mt from 5.123Mt in the same month last year.

Cement sales rise 7% in November

KARACHI: Cement sales jumped seven per cent year-on-year to 4.82 million tonnes in November, according to the data released by All Pakistan Cement Manufacturers Association on Monday.

Despite an increase in the commodity’s price, domestic sales grew 10.2pc to 4.124m tonnes during the month amid an improvement in construction activity. However, exports fell 9.2pc to 695,779 tonnes from 766,273 tonnes a year ago.

North-based mills despatched 3.469m tonnes in the domestic markets as against 3.129m tonnes in November last year, showing a rise of 11pc. However, cement exports from these mills plummeted 70pc to 55,234 tonnes in November from 182,091 tonnes in the same month last year.

Domestic despatches go up amid increased construction activity, while exports suffer due to higher freight rates

Mills based in the southern region sold 654,983 tonnes in the local market during November, an increase of 7pc compared to 613,113 tonnes a year ago. Exports from the southern mills went up by 9.65pc to 640,545 tonnes in November from 584,182 tonnes during the same month last year.

Five-month sales
In the first five months (July-November) of the current fiscal year, overall cement sales dropped 4pc year-on-year to 22.86m tonnes.

Domestic despatches grew 3pc to 20m tonnes during the five-month period compared to 19.455m tonnes a year ago, whereas exports plunged 35pc to 2.853m tonnes from 4.384m a year ago. Despatches from the north-based mills amounted to 16.785m tonnes domestically during the period, a marginal increase of 0.17pc on a year-on-year basis. Exports from these mills nearly halved to 516,003 tonnes during July-November compared to 1.087m tonnes in the year-ago period.

Domestic despatches by mills based in the southern region stood at 3.22m tonnes, showing a rise of 19.4pc compared to 2.698m tonnes during the five-month period a year ago. In contrast, exports from these mills dropped sharply by 29pc to 2.337m tonnes during the period under review.

Mehroz Khan of Topline Securities said domestic cement sales in November went up amid increased construction activity and post-Covid economic recovery, while exports suffered because of higher freight rates.

He said the retail price of cement in November averaged at Rs734 per 50kg bag in the northern region, an increase of 4pc compared to October. In the southern region, the average retail price jumped by Rs29 per bag to Rs749.