KARACHI - The sale of cement in local market is expected to plunge by 6 per cent and to reach 21 million tons in current fiscal 2008-09 against 22.4 million tons of financial year 2007-08, analysts told The Nation on Thursday.   The analysts said the inflationary pressures in the economy have substantially increased cost of construction which might result in a fall in demand for cement. While, due to fiscal imbalances, the utilization of Public Sector Development Program will be low and it could result in lower infrastructure spending in current fiscal, analysts said, adding the increase in cement prices on account of rising cost of production will also hamper the cement demand in the country. The analysts expected that the improvement in prevailing political and economic issues will result in medium term revival of demand of cement in local market. The cement sales are highly correlated with the economic condition prevailing in the country. With inflation at record high level and GDP growth expected to decline, local cement sales are also expected to face the brunt, analyst says, adds, we expect overall sales in FY09 to remain flat at 30.2mn tons with local sales at 21mn tons while exports to reach 9.2mn tons. Meanwhile, massive construction activities were on surge in Middle East, South Africa, Sri Lanka and India but these countries facing considerable cement shortage, analysts pointed out and adding this shortage will enable the access for Pakistani cement companies. Keeping in view the prevailing shortage in Middle East, South Africa and other countries, the analyst hoped that cement exports will up by 20 percent and to reach 9.2 million tons current fiscal 09. However, with new capacities coming online in Middle East and India which is the largest export market for Pakistani cement, the analysts expected that exports to take a dip beyond FY09. While demand for cement in South Africa was expected to remain high owing to the soccer world cup in 2010, market analysts observed and believed that the cement exports to witness a CAGR of -3% over FY10-12.  Till FY08, total cement capacity in the country reached 37.2mn tons, with an addition of 6.9mn tons during FY08. In future, with major expansions by Bestway (1.8mn tons), Lucky (1.26mn tons) and Fauji (2.16mn tons), a cement manufacturer said that total capacity to reach 48mn tons by FY11. Meanwhile, with these new expansions and slowdown in cement sales, the utilization levels of cement expected to range between 67-72% over FY09 to 2012, he concluded.