Pakistan Per Capita Cement Consumption Hit New High of 170 Kg in 2016

Pakistan's domestic cement consumption reached 35 million tons in 2016, up from 30 million tons in 2015, according to a report published by Global Cement.  Using the latest census population of 207 million, it works out to about 170 Kg per person consumption. The increase is driven by a combination of CPEC-related infrastructure projects as well as commercial and housing construction.

Pakistan Cement Sales. Source: Global Cement

While domestic demand for cement is continuing its upward trend, the exports have suffered a major decline. In 2009, the exports hit a high of over 11 million tons, constituting 34% of all cement dispatches at the time. Since then, they have fallen to below 6 million tons or 14% of all sales.

Pakistan cement industry is booming. There is some disagreement about where the biggest demand is coming from.  The CEO of Thatta Cement says it is 60% infrastructure and 40% housing but others say it is 70% housing and 30% infrastructure.

Pakistan's 11 cement manufacturers are investing a combined $2.25 billion to add new production capacity of 30 million tons a year by 2019, according to a media report attributed to the State Bank of Pakistan.

The year 2017 is also proving to be yet another boom year for cement industry. Cement sales have soared by 15% year-on-year to 10.3 million tons in the first quarter of fiscal year 2017-18 that ended in September 2017, up from 9 million tons in the same period in 2016.

Pakistan is among the world’s fastest-growing construction markets. A BMI report published earlier in 2017 forecasts an average 12 percent growth annually for the next five years.  Cement capacity utilization increased to 88 percent in the 10 months through April, the highest in 11 years, according to Bloomberg.

Beyond the construction industry boom, Pakistan's large scale manufacturing (LSM) sector is also soaring by double digits. Both of these sectors are important drivers for job growth in the country.

Although production was driven mostly by strong domestic demand, the exports in July-Sept 2018 also increased nearly 11% over the same period last year.

Among the notable sub-sectors driving strong LSM growth in July-August 2017 are: Tractors 115%,  motorcycles 28.3%, deep freezers 16.2%, air-conditioners 26.8%, electric-fans 22.4%, electric motors 17.3% and electric meters 18.3%, and switchgear 20.8%.

Significant improvement in the country's security situation is helping restore confidence of investors, businesses and consumers who are pushing economic growth in Pakistan to new highs. The fast pace of execution of China-Pakistan Economic Corridor (CPEC) related projects is at least partly responsible for it.

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Riaz Haq said…
Pakistan's bustling economic activity tries to recover from ruins of terrorism

GDP is forecast to grow by 6 percent this year from 5.28 percent in the 2016-2017 financial year.

Pakistan is expected to become the world’s 20th largest economy by 2030 and the 16th largest by 2050 based on results of previous years. It is also expected to be the world’s fastest-growing Islamic economy in 2017. This is no small feat considering that it was engulfed in turmoil a few years ago. Six years ago Al-Qaeda leader Osama Bin Laden was killed by the US navy seals during a bloody shoot out that shocked the world in a compound in Abbottabad, as the war on terrorism continued.

The government says the phenomenon has cost the the country $68 billion in direct and indirect impact between 2000 and 2010. The army is always on the street - a reminder of the precarious situation that Pakistan still finds itself in.

Even the 750 delegates from 85 different countries who attended the Emerging Pakistan initiative had to be under full time police escort. Snipers on top of buildings are a common site in the country. But the country wants to reclaim its national image and narrative and present it for what it truly is: positive and full of potential.

Pakistan is building a brand that communicates the opportunities to a diverse audience that includes investors both international and local. Organisers says the attendance was double the size from last year.
Riaz Haq said…
Pakistan sales drive continues in second half of 2017
Written by Global Cement staff
08 January 2018

Pakistan: Cement sales rose by 12% year-on-year to 22.2Mt in the last six months of 2017 from 19.8Mt in the same period in 2016. Data from the All Pakistan Cement Manufacturers' Association (APCMA) shows that domestic consumption rose by 17.4 % to 19.8Mt from 16.9Mt, according to the Express Tribune newspaper. However, exports continued to decline in the period by 17.3% to 2.9Mt from 2.4Mt. Exports fell in most parts of the country, particularly in the south, despite increases from plants in Punjab and Khyber-Pakhtunkhwa. The APCMA has blamed this on high industry costs, foreign imports and local legislation.
Riaz Haq said…
DG Khan Cement announces completion of Pakistan’s biggest $300mln plant

KARACHI: DG Khan Cement on Wednesday announced the start of the country’s biggest cement plant with around 9,000 tons/day capacity at an estimated cost of over $300 million as construction sector is booming in the market seeing a double-digit growth in the commodity’s demand.

“DG Khan Cement has completed the installation of Pakistan’s largest cement plant at Hub, Balochistan,” the cement maker said in a statement to the Pakistan Stock Exchange. “The largest vertical cement grinding mill with cope drive has started trial operations together with cement silos and packaging plant. Also, successful commissioning has been completed in raw material crushing, transportation and storage departments.”

The new plant has a capacity to produce 8,500 to 9,000 tons/day and was expected to employ 1,000 workers.

DG Khan Cement is the third biggest cement producers in the country with a production capacity of 14,000 tons/day. The cement market has now four cement plants: two located in Dera Ghazi Khan, one in Chakwal and new one in Hub.

“The cement produced in the trial run is being dispatched to customers,” the company said. “Announcement of commercial production will be made in due course of time.”

The company has been setting up the plant using European technology for the past one decade, and is estimated to cost Rs35 to Rs40 billion. The cement maker had signed an agreement with K-Electric for 40 megawatts of electricity needed for the plant.

Cement sales increased 15.1 percent to 38.996 million tons during the first 10 months of the current fiscal year of 2017/18 due to infrastructure uplifts and recovery in exports.

Local cement consumption and exports stood at 33.880 million tons in the corresponding period a year earlier, according to All Pakistan Cement Manufacturers Association’s data.

Contribution of south-based mills in aggregate sales and exports stands at around 18 percent as they sold 6.087 million tons in the local markets and exported 1.236 million tons in the July-April period.

Pakistan’s 24 cement plants have capacity of producing 47 million tons of clinker and 49 million tons of cement a year.

Local cement industry is massively investing in capacity enhancement in view of China-Pakistan Economic Corridor projects, which are estimated to cost more than $57 billion.

They planned to increase production capacity by 26 to 28 million tons to 72 million tons plus within the next two to three years.
Riaz Haq said…
#Pakistan #automobile sales up by 21% in July-June 2017-18. Total car sales have gone up by 21 per cent in the last fiscal year with 216,786 units sold as compared to 185,781 units in the last fiscal year. #Manufacturing #economy via @profitpk

In June 2018, auto sales were up 20 per cent YoY to 15,662 units whereas it was down 15 per cent month-on-month (MoM) due to the Eid holidays during June.

In a comment to Pakistan Today, Pak Kuwait Investment Company AVP Research, Adnan Sheikh said that “Auto sales have been increasing mainly due to a low-interest rate environment and the advent of ride-sharing apps, along with the introduction of new models like Civic BRV, Fortuner and The Wagon-R which have all performed well. But major growth in numbers comes from below 1000cc cars, mainly the Wagon-R for the price-conscious buyer and ride sharing captains. Mehran and Wagon-R together added around 20,000 additional unit sales. So you can see most buyers are in the price conscious category, whereas Honda’s sales grew because of two new models – new Honda Civic and BRV. While Toyota shifted production from the Corolla to the high-profit margin Fortuner and Hilux, volumes for the Fortuner more than tripled. Going forward, we may witness a slowdown in growth / potential dip in sales if car prices keep rising due to a rupee depreciation and higher international commodity prices, along with a sharp rise in interest rates and a spike in fuel prices; and the market will become extremely competitive when new players start producing with cost advantages under ADP incentives over the next two years”.

For the Fiscal Year ended 2018, Pakistan auto sales (including LCVs Vans and Jeeps) rose by 21 per cent year-on-year (YoY) with growth seen in all segments. “The strong performance was due to a multitude of reasons ranging from supportive macroeconomic environment, cheaper financing, demand from ride-hailing services, as well as demand generated from election activity,’ said an analyst at Topline securities. This slowdown in car sales is due to higher car prices as the company raised car prices for the third time during this fiscal year, continuous Pak-rupee depreciation against the dollar, he added. The major reason of declining car sales is the restriction imposed by the government on non-filers for booking and registration of new cars, and resumption of import of used and new cars through personal transfer or baggage scheme, the analyst said.
Riaz Haq said…
#Pakistan #cement sales go up by 2.56pc in first quarter of FY 2019-20. In September, total dispatches increased by 11.51 percent to 4.270 million tons. Domestic sales increased to 9.116m tons from 9.063m tons while #exports grew by 12.54pc to 2.017m tons

Pakistan’s total cement dispatches during first quarter of the fiscal year went up by 2.56 percent to 11.133 million tons. Out of total sales, local dispatches increased to 9.116m tons from 9.063m tons while exports grew by 12.54pc to 2.017m tons from 1.792m in the last fiscal year. In September, total dispatches increased by 11.51 percent to 4.270 million tons compared to the corresponding period last year. During the month, domestic consumption reached 3.472m tons from 3.114 million tons during the same month last year. Exports rose to 0.798 million tons last month as compared to 0.715 million tons in September 2018. Local consumption in the northern region during the month under review swelled by 22.4pc to 3.027m tons from 2.47 million tons in September 2018. The southern region witnessed 30.48pc drop in dispatches to 0.446m tons from 0.64 million tons in September 2018. Industry experts said the lopsided consumption pattern has benefited plants located in the northern region while those operating in the south have entered the red zone in view of over 32 percent drop in uptake during the first quarter of this fiscal year. They said the country has the potential to produce about 60 million tons of cement per year. Recently, a cement company has closed its old plant, which had production capacity of 3,150 tons per day. The government has given tax benefits on the introduction of new technology in cement plants. At present, the interest rate in Pakistan is so high that no one is considering starting a new business.

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