LAHORE - The DG Khan Cement and Maple Leaf Cement export sales registered handsome growth of 113 per cent and 114 per cent, besides increasing their market shares in export sales to 14 per cent and 12 per cent respectively. According to the latest data, Lucky Cement, the largest cement exporters in Pakistan, strengthened its position in the export market with growth of 29 per cent, however market share trimmed down to 30 per cent from 35 per cent last year, however, Pioneer and Lafarge Cement depicted negative growth of 70 per cent and 15 per cent. Cement exports in the outgoing year FY09 grew by 47% compared to total dispatches growth of 2%. Regional capacity constraints drove exports upwards. Though regional capacity expansions by FY10 are likely to hurt exports, experts believe tapping of new markets will help mitigate damage. Decline in export retention prices remain a downside risk to our valuation. JS Capital Market experts maintain their 'Market-Weight stance on the sector with Lucky and DG Khan Cement amongst their preferred plays. Cement exports in FY09 depicted an astounding growth of 47% to 11.4mn tons compared to 7.7mn tons last year. Despite global recessionary woes, regional cement demand remained afloat largely driven by previously initiated projects in the Middle East and reconstruction activities in worn torn Iraq & Afghanistan. Local cement manufacturers capitalized on the regional cement shortfall as they looked to increase their export to local sales ratio with local sales (down 14%) dwindling last year. Moreover, rupee devaluation against US$ (16%) and higher retention for export sales proved further incentives to expand export horizons for manufacturers. In FY09, export retention on average touched a high of Rs260 per bag (US$65 per ton) compared to Rs235 per bag locally. Currently, export retention is hovering around Rs225 per bag (US$55 per ton) while local retention is averaging at Rs210. GCC region is set to increase its capacity by 119% by the end of FY10 which will hurt Pakistans cement exports to the region. GCC constitutes 39% of the total cement exports with Qatar, Oman & UAE leading the pack with 12%, 10% and 10% share. However, new markets are being explored with some success already achieved. This is evident from details made available by TDAP, which shows exports sales have increased to countries like Sri Lanka, Lebanon, Sudan & Mozambique since last year. Political tensions with India and law & order situation in Afghanistan borders adjoining areas remain key concerns as well. Last year cement exports to India fell by 24% with 15% rise in exports to Afghanistan amid rehabilitation post war. Hence, going forward we expect exports to depict a decline of 6%YoY in FY10.