The Bell about Construction and Material – Elixir Securities Limited

Karachi: Cements: Local dispatches record high during March

According to Elixir Securities Limited,


Cement Dispatches Million tons
Mar-11 Mar-12 YoY Feb-12 MoM 9MFY11 9MFY12 YoY
North 1.77 2.11 19% 1.54 37% 13.13 14.14 8%
South 0.45 0.44 -2% 0.40 11% 2.91 3.25 12%
Local 2.22 2.55 15% 1.94 32% 16.04 17.38 8%
Afghanistan 0.46 0.33 -29% 0.27 21% 3.28 3.34 2%
India 0.06 0.04 -42% 0.04 -19% 0.38 0.48 26%
Other Sea 0.29 0.26 -10% 0.25 4% 2.91 2.43 -17%
Exports 0.81 0.63 -23% 0.57 11% 6.56 6.24 -5%
Total Offtake 3.04 3.18 5% 2.51 27% 22.60 23.63 5%


Source: Elixir Research, APCMA

Local dispatches post strong growth

Local cement dispatches during 9MFY12 increased by 8% to 17.4mn tons due to improvement in demand from North. Local dispatches for North during 9MFY12 increased by 8% on strong demand from construction industry whereas south dispatches increased by 12% due to low base effect. Local off takes during Mar-12 stood at 2.55mn tons, highest during FY12, registering growth of 15% over last year. Seasonal recovery was witnessed in Mar-12 as local dispatches posted growth of 32% as compared to Feb-12 driven by 37% rise in North dispatches due to improvement in demand post winter period. Elixir Securities Limited see local cement dispatches to improve further whereas prices would remain major contributor to profitability for cement manufacturers.

Export off takes drop by 5%

Export dispatches posted a decline of 5% during 9MFY12 due to slowdown in demand from sea based export markets which declined by 17% during the period. Exports to India posted a strong growth of 26% during 9MFY12 as compared to last year while Afghanistan was up a mere 2% during the period. Exports declined by 23% to 0.63mn tons during Mar-12 mainly due to bleak demand from all of export destinations. Exports to India dropped by 42% during the month while Afghanistan and sea based exports dropped by 29% and 10% respectively. Weak Afghanistan exports were mainly due to significant rise in prices from USD40/ton to USD55/ton. Arif Habib Limited’s channel checks suggest that exports to Afghanistan would likely improve going forward as prolonged winter season has come to an end and the price increase would likely be absorbed by construction industry of Afghanistan. Exports to Afghanistan witnessed seasonal uptick in demand post winter season increasing by 21% during Mar-12 as compared to Feb-12.

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