Local Cement Sales Down by 11% YoY in Jul-2024

Staff Report
Pakistan’s local cement dispatches are likely to be down by 11% YoY, clocking in at 2.46 million tons in July 2024. Dispatches are also anticipated to decline by 20% MoM.Topline Cement Universe Sees 13% QoQ Profit Increase in 4QFY24

The MoM decrease in local cement dispatches is primarily due to the expected hike in cement prices in July 2024 amidst an increase in FED by the government to the extent of Rs100/bag.

Furthermore, strikes from some dealers and retailers in retaliation to budgetary measures by the government also led to a decline in cement sales, in our view.

To recall, alongside the increase in FED, the FY25 budget also increased withholding tax from 1% to 2.5% on the turnover of distributors/retailers.

Considering the above sales figures, the average daily domestic sales for the sector are expected to clock in at 79.4k tons/day in July 2024, which is lower than the July 2023 average of 89.7k tons/day.

Exports during July 2024 are anticipated to increase by 16% MoM and by 22% YoY.

The increase in exports on a MoM basis is due to the increase in exports of DGKC/ACPL by 36%/55% MoM, respectively.

This takes Pakistan’s total cement sales to around 3.01 million tons in July 2024, down by 7% YoY and 15% MoM.

Total cement capacity utilization in July 2024 is estimated to clock in at 44% vs. 52% in June 2024 and 47% in July 2023.

Company-wise, FCCL local sales are up by 9% YoY, contrary to the industry trend, due to production from the DG Khan city plant.

The average retail price in July 2024 increased by 15% MoM in the North and 14% MoM in the South, as per PBS.