Cement sales post impressive 42pc growth in March

As the construction sector trajectory ticks upwards, the sales of cement too extended their run of growth into March, with the growth of 42 percent YoY to 4.6 million tons.

“Even though continued support to construction sector has uplifted cement demand in the country, the aforesaid growth has been amplified by low base where on YoY basis, COVID-19 related restrictions in Mar’20 kept the base low while on MoM basis lower number of working days in Feb’21 contributed to a low base,” stated AKD Securities.

As per the data released by the All Pakistan Cement Manufacturer Association, local dispatches from the South posted a higher growth rate among the two regions of 62pc YoY. Meanwhile, North’s growth rate stood at 39pc YoY.

Experts anticipate that the local demand is expected to remain strong as the private sector continues to support while an additional stimulus is expected to arrive from projects being initiated by government under Naya Pakistan Housing Scheme.

Furthermore, cement exports also registered an impressive growth of 26pc YoY and 4pc MoM where resolution of supply chain issues also contributed to the cause. Overall, dispatches for 9MFY21 stand at 42.9mn tons, up 16pc YoY.

“With winter in the rearview, construction activity is expected to pick up while the medium-term outlook remains bright on the back of various incentives being provided to the construction industry. Though political factors have put significant pressure on the cement sector and broader market lately, fundamentals of the sector remain strong and once political uncertainty subsides, we expect the cement sector to again be among the frontrunners with players easily passing on the increase in cost coupled with demand remaining strong,” said AKD Securities.