The Cement Sales Are Expected to Grow 8.0 Percent on Yearly Basis in Fiscal Year 2012-13

The increase in allocation of Public Sector Development Programme (PSDP) for the construction of mega infrastructure will lead to growth in cement sales and profitability of its producing units in the financial year of 2012-13. Analysts said that the reconstruction activities in the flood-hit areas of the country coupled with private sector housing and commercial projects supported by robust remittances are likely to support domestic cement demand. The local sales are expected to grow 8.0 percent on yearly basis in fiscal year 2012-13. On the export front, consolidating trend is a positive sign and we believe demand from established export markets (Afghanistan, South Africa and East Africa) in fiscal year 2012-13 is likely to remain steady. The government has allocated Rs 873 billion in budget for fiscal year 2012-13, out of which federal PSDP is set at Rs 360 billion and provincial PSDP at Rs 513 billion. Moreover, the federal excise duty FED on cement was reduced to Rs 400 per metric tonnes in the budget for fiscal year 2012-13. The construction of Diamer Bhasha Dam is expected to create additional demand of 8-9 million tonnes over a period of seven to eight years, analysts said. The project is expected to commence some time in the first quarter of fiscal year 2012-13 as residential colonies for workers of the project have already been constructed. Overall though, the key to profitability remains the pricing power of the industry, which has grown stronger in recent times. In addition, low coal prices and steady volumes are likely to keep the sector profitability intact. The cement volumes witnessed slight growth of three percent on yearly basis in the 11 months of 2011-12, standing at 29.5 million tonnes as against 28.5 million tonnes, the data of All Pakistan Cement Manufacturer Association (APCMA) stated. Source: uaecement