Last month had been a rather lull one for the cement sector of the country. On a year-on-year, as well as on a month-on-month basis, cement dispatches largely depicted a falling trend. Relative to October 2011, both local and export dispatches declined considerably, with a major dent witnessed from the southern region in local dispatches, and in exports to India. Interestingly, it seems that the optimism observed when MFN status was granted to India has little weight looking at the 50 percent month-on-month decline in dispatches to India. As for a year-on-year comparison with November 2010, the last month witnessed a dip of about ten percent in total exports, and five percent in local dispatches. The year-on-year decline in local dispatches was led by a decline in northern sales, which dipped about seven percent versus the same month last year. On the export front, while exports via sea and to Afghanistan decreased, those to India increased in November 2011 relative to November 2010. The volumetric decline in local dispatches is plausibly attributed to very low government spending, with the management of some companies foreseeing subdued volumetric growth in the wake of curtailed PSDP expenditures. On the export front, lower export prices in international markets, particularly in the Middle East and Africa, were responsible for impinging on export sales. While Afghanistan witnessed a decline in November 2011 on a month-on-month and year-on-year basis, cement manufacturers are hopeful that construction work in Kabul and other areas will help bring up dispatches during the year to over 5 million tons. A comparison of 5MFY12 against 5MFY11 makes this year appear better. However, is likely due to the low-base effect of the previous year, during which sales were much-affected in the first half due to the floods. Going forward, it appears that the cement industry will be facing a tough FY12. There aren a lot of positives on the export side, except for hopes of exports to Afghanistan picking up, while local dispatches are likely to be affected because of lower PSDP allocations this fiscal year.
======================================================== CEMENT DISPATCHES ======================================================== (mn tons) 5MFY12 YoY Nov FY12 MoM ======================================================== Local 8.9 7% 1.6 -21% North 7.3 5% 1.4 -19% South 1.6 19% 0.3 -31% Exports 3.8 -4% 0.6 -22% Afghanistan 2.1 13% 0.3 -31% India 0.3 63% 0.05 -50% Other, clinker (sea) 1.4 -27% 0.2 -15% TOTAL 12.7 4% 2.3 -23% -------------------------------------------------------- Source: APCMA ========================================================
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