Cement sales in Pakistan expected to post double-digit growth in Jan

Pakistan local cement sales in January 2021 are expected to post double-digit growth i.e. witnessing an increase by 14 to 18 percent year-on-year (YoY), maintaining a trend of strong YoY growth through the fiscal year.

Whereas, on Month on Month (MoM) basis the local cement sales are likely to decline 7-11pc due to seasonality and in line with previous two years trend, said Topline Securities.

The brokerage house in its latest research was of the view that the strong growth in local cement dispatches is on the back of several factors including flow of additional equity i.e. Rs 43 billion towards construction sector in last three months. Secondly initiation on work on dam, thirdly progress on construction package and lastly due to the pent up demand of last two years.

It anticipates cement exports during January 2021 are likely to witness at decline of 14 to 18pc YoY, while they are likely to grow by 5 to 9pc MoM. The report wasof the view that the decline in exports is attributed to congestion problem at ports and rising share of more profitable local sales in the north region.

Total cement sales in January 2021 are expected to clock at 4.3 to 4.7 billion tonnes up 8-12pc YoY and down 5-19pc MoM.

Meanwhile, the industry utilisation during January 2021 is anticipated to clock at 80pc compared to to 7MFY21 average utilisation of 86pc. In 7MFY21 cement sales are expected to increase by 14 to 16pc YoY with local sales expected to reach 15 to 17pc YoY growth and export sales increase of 9 to 11pc YoY.