Cement: Domestic sales in May show a robust trend, up 9.8%YoY

Cement: Domestic sales in May show a robust trend, up 9.8%YoY

§        As per the latest data release by All Pakistan Cement Manufacturers Association (APCMA), cement dispatches in May 2014 surged by 6.2% YoY to 3.07mn tons.

§        The growth is driven by local sales, which surged by 9.8%YoY while export sales too ticked up by 6.2%YoY.

§        On a MoM basis, cement sales dipped by 4.5%MoM with domestic sales sliding by 9.1% due to shortage of labour on account of the wheat harvesting season. Exports on the other hand showed a healthy recovery (+12.9%) with demand likely stemming from Afghanistan and Africa .

§        Cumulatively, in 11MFY14 total cement offtake stood at 31.0mn tons, up 1.6% YoY comprising of 1) local sales growth of 3.3% YoY and 2) decline of 3.4% YoY in export sales.

§        Our discussion with the major cement companies suggest that they are not too concerned on the increase in cess on gas for CPP’s since they plan to pass it on the final consumer resulting in relatively unscathed margins.