LAHORE: Pakistan’s cement sector has cumulatively posted a loss of Rs13bn in FY20, with 4QFY20 recording a loss of Rs4.7bn.
However, loss in 4QFY20 witnessed a contraction of 20pc QoQ. This depressing bottom-line during FY20 was largely due to a decline in retention prices given stiff competition amongst manufacturers to gain market share as well as a slowdown in economic activity in 4QFY20 due to Covid-19 outbreak.
The net sales of the sector declined by 17pc YoY in FY20 to Rs242bn with 4QFY20 sales declining by 30pc YoY and 18pc QoQ. Volumetric sales of the sector grew by 2pc YoY to clock in at 47mn tons during FY20, wherein local sales remained largely unchanged while exports increased 20pc YoY.
Local retention prices fell in the range of 18-22pc YoY due to competition over gaining market share amongst players, increase in Federal Excise Duty (FED) to Rs2.0/kg (from Rs1.5/kg) in FY20 budget – which the companies were not able to completely pass through, and an increase in dealer margins to penetrate and augment market share.
