LAHORE -

The local cement dispatches near the end of the current month were recorded at 1.36 million tons while exports in the same period were reported at 0.54 million tons, it was learnt on Thursday.

Industry sources said that volumes have been customary slow during the first half of the month owing to the shortage of labour. Note that the commencement of the wheat harvesting season from second half of April to mid May diverts labor away from the construction industry.

This year though the situation was further exacerbated due to the general elections. According to industry sources, things near the end of the current month have normalized now and construction activity has been picked up.

Hence, industry experts are expecting that total cement dispatches in May to clock in at 2.85 million tons, a decline of 2 per cent annually and 5 per cent monthly. “However, local sales are likely to remain steady compared to last year (up 3 per cent YoY) but on a MoM basis the same is likely to dip 4 per cent, observed Furqan Ayyub, an analyst. Cumulatively in 11MFY13, he anticipates overall dispatches to settle at 30.51 million tons, up 3 per cent YoY.

Post elections (Since May 13), the Construction and Material sector has gained 8.4 per cent (outperformed the market by 1.6 per cent ) on expectations that infrastructure development will pick up in the Northern region of the country under the recently elected PML-N led government. Currently, experts remain cautious on that front due to the prevailing macro economic challenges and maintain their volumetric growth target of 3 per cent YoY in FY14F.

However, if any special aid from Saudi Arabia materializes, cement volumes are likely to get a major boost. Experts still maintain positive stance on the Pak Cement sector citing firm margins, falling debt levels and attractive valuations as key triggers.