Expert gives credit to government’s amnesty scheme
Cement companies in Pakistan have marked their highest sales in the financial year 2020-21 since 1990, according to the data maintained by the All Pakistan Cement Manufacturers Association.
The industry also reported the highest growth of 20% since the fiscal year 2007-8, when it was recorded at 25%. But the quantity sold last financial year by the cement companies was almost double at 57 million tonnes as compared to 30 million tonnes sold in 2007-8.
“The FBR’s amnesty scheme played an important role in the high sales,” said Senior Research Analyst Ali Zaidi. “It helped government bring black money in the tax net.”
The cement sales during the financial year 1990-91 were reported at 7.3 million tonnes. It can be assumed that the recent annual cement sales may have been the highest in the country’s history.
Zaidi added that the cement stocks performed well during the last one year and some cement stocks such as Lucky and Pioneer share prices even doubled.
He added that the demand has been very high from people for houses, which was also propelling construction activity in the country.
But Zaidi says the Naya Pakistan Housing Scheme, which will be focusing on low-cost houses, is yet to begin and the prospects for the construction sector and subsequently for cement demand will remain high owing to it as well as the expected construction of dams.
Meanwhile, APCMA has credited the construction activities under Naya Pakistan Housing Scheme coupled with government initiatives and PSDP allocation for high cement sales.
During the financial year 2020-21, as the total cement dispatches of the country grew by 20% to 57.433 million tonnes from 47.812 million tonnes during FY 2019-20.
“Financial year 2020-21 has been a good year for cement, as demand has grown considerably,” said APCMA spokesperson. “Cement industry is expanding its capacity from 70 million tonnes to around 100 million tonnes with the hope that the demand will increase by 15% annually for the next three years due to an increase in allocation in PSDP, CPEC related projects and housing as well as industrial demand.”
Cement bag price saw an increase of Rs110 last year. The APCMA says it was due to increasing coal and furnace oil prices but analyst Zaidi said that the prices mainly went up due to a high demand that year.