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Karachi’s construction sector is experiencing a slowdown, reflected in a slight decline in local cement sales. Data from the All Pakistan Cement Manufacturers Association (APCMA) shows a 0.62% year-on-year drop in local dispatches for March 2024.

However, there’s a bright spot. Cement exports witnessed a significant increase of 38% in March compared to the same month last year. This rise, coupled with steady export growth throughout the fiscal year, suggests a positive trend in the export market.

Looking at the bigger picture:

  • Local cement despatches for the first nine months of the fiscal year (9MFY24) are down 3.81% compared to the same period last year.
  • On the other hand, export despatches during 9MFY24 surged by a strong 68%.
  • Overall cement despatches (domestic and export) for the entire fiscal year to date (July-March FY24) have grown by 2.68%.

Industry experts attribute the slowdown in local sales to several factors:

  • Increased construction costs due to expensive materials.
  • High base effect – sales were boosted last year by flood-related reconstruction activities.
  • Challenges in transporting cement due to axle load restrictions.

The APCMA is hopeful that the new government will address industry concerns regarding underutilized capacity due to slow domestic demand.

Export growth is primarily driven by Lucky Cement’s recent success in securing orders from African countries.

Retail cement prices saw a mixed bag in March. The average price per 50kg bag increased by Rs10 in the south but decreased by Rs6 in the north.

Analysts predict a flat year for local sales compared to an earlier estimate of 5% growth. However, they expect export momentum to continue. Total cement despatches for the fiscal year are projected to reach 47 million tonnes, representing a 5% increase.

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