In a positive sign, Construction Industry of Pakistan starts to recover back
ISLAMABAD - In a positive sign, Construction Industry of Pakistan starts to recovery back, media report has revealed.
The Pakistani cement sector has seen sales increase by 5% over the first four months of the fiscal year ending June 30, 2020, according to data released by the All Pakistan Cement Manufacturers Association (APCMA), signaling what some analysts believe is at least a temporary recovery in the construction industry.
The news came as something of a surprise to market analysts, who had anticipated a continuation of the slump that had appeared to affect the industry over the last several months.
“The surprise rebound can be attributed mainly to the demand from private sector where housing schemes resuming/starting production played a part,” wrote Shahrukh Saleem, a research analyst at AKD Securities, an investment bank, in a note issued to clients on November 4, 2019.
The data backs up Saleem’s comments: while export sales were up 17% in the first four months of fiscal year 2020 compared to the same period last year, they account for just 17.4% of total cement sales during that period.
The much bigger impact came from domestic sales, particularly in the northern part of the country, which saw a 12% increase during that same period, compared to a 31% decline in the southern part of the country.
The bulk of the gains seen by the sector appear to largely be coming from three companies – Maple Leaf Cement Factory, Cherat Cement, and DG Khan Cement, all three of which were able to significantly increase their sales in October.
“As per our channel checks, during the month of October, Maple Leaf Cement (MLCF) and Cherat Cement Limited (CHCC) are expected to post a massive jump in total sales by 86% and 91% to 541,000 tons and 370,000 tons, respectively,” wrote Karim Punjani, a research analyst at Topline Securities, a securities firm, in a note issued to client on November 5.
“This was primarily led by healthy domestic sales and aggressive marketing after their capacity additions.”