ISLAMABAD – In a positive sign, Construction Industry of Pakistan starts torecovery back, media report has revealed.
The Pakistani cement sector has seen sales increase by 5% over the firstfour months of the fiscal year ending June 30, 2020, according to datareleased by the All Pakistan Cement Manufacturers Association (APCMA),signaling what some analysts believe is at least a temporary recovery inthe construction industry.
The news came as something of a surprise to market analysts, who hadanticipated a continuation of the slump that had appeared to affect theindustry over the last several months.
“The surprise rebound can be attributed mainly to the demand from privatesector where housing schemes resuming/starting production played a part,”wrote Shahrukh Saleem, a research analyst at AKD Securities, an investmentbank, in a note issued to clients on November 4, 2019.
The data backs up Saleem’s comments: while export sales were up 17% in thefirst four months of fiscal year 2020 compared to the same period lastyear, they account for just 17.4% of total cement sales during that period.
The much bigger impact came from domestic sales, particularly in thenorthern part of the country, which saw a 12% increase during that sameperiod, compared to a 31% decline in the southern part of the country.
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The bulk of the gains seen by the sector appear to largely be coming fromthree companies – Maple Leaf Cement Factory, Cherat Cement, and DG KhanCement, all three of which were able to significantly increase their salesin 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 jumpin total sales by 86% and 91% to 541,000 tons and 370,000 tons,respectively,” wrote Karim Punjani, a research analyst at ToplineSecurities, a securities firm, in a note issued to client on November 5.
“This was primarily led by healthy domestic sales and aggressive marketingafter their capacity additions.”
