Cement Sales Growth Falls Short of Expectations

March 5, 2025 Mahi Bukhari

Industry Awaits Budget Measures to Boost Capacity Utilisation

Overview of Cement Sales in February 2025

Domestic cement dispatches in Pakistan saw a moderate increase in February 2025 but did not rise as much as expected. This follows an 11.64% increase in January after months of declining sales. The latest figures, released by the All Pakistan Cement Manufacturers Association (APCMA), indicate that the sector is yet to witness a strong revival.

According to the APCMA, local cement dispatches reached 3.065 million tons in February 2025, marking a 6.82% increase compared to 2.869 million tons in February 2024. On the other hand, exports surged by 34.30%, rising from 395,935 tons in February 2024 to 531,736 tons in February 2025. This led to total cement dispatches reaching 3.596 million tons, reflecting a 10.15% year-over-year growth.

Performance Breakdown: North vs. South Cement Mills

North-Based Cement Mills

Cement mills in North Pakistan dispatched 2.556 million tons, an increase of 5.06% compared to 2.433 million tons in February 2024.
Domestic sales in the North rose 7.22% to 2.507 million tons from 2.338 million tons in February 2024.
However, exports from the North plummeted by 47.82%, dropping from 95,393 tons in February 2024 to 49,780 tons in February 2025.

South-Based Cement Mills

Cement mills in the South performed better, dispatching 1.04 million tons, a 25.04% increase from 0.831 million tons in February 2024.
Domestic sales in the South increased modestly by 5.06%, reaching 557,895 tons, compared to 531,044 tons last year.
Exports surged significantly by 60.36%, climbing from 300,542 tons in February 2024 to 481,956 tons in February 2025.

Cement Sales in the First Eight Months of FY25

Overall Dispatches (July-February 2025)

For the first eight months of the fiscal year (July 2024 – February 2025), total cement dispatches (both local and export) were 30.423 million tons, reflecting a 0.45% decrease from 30.560 million tons in the same period last year.

Domestic Cement Sales

Domestic cement dispatches declined by 6%, dropping from 26.06 million tons in July-February FY24 to 24.5 million tons in FY25.

Export Growth

Despite lower domestic consumption, exports grew by 31.78%, reaching 5.924 million tons, compared to 4.495 million tons in the corresponding period of FY24.

Comparative Analysis: North vs. South Cement Markets

North-Based Cement Mills (Jul-Feb FY25)

Domestic dispatches: 20.36 million tons (5.28% decline from 21.49 million tons in FY24).
Exports: 1.101 million tons (20.42% increase from 0.914 million tons in FY24).
Total dispatches: 21.462 million tons (4.23% decline from 22.410 million tons in FY24).

South-Based Cement Mills (Jul-Feb FY25)

Domestic dispatches: 4.139 million tons (9.42% decline from 4.570 million tons in FY24).
Exports: 4.822 million tons (34.68% increase from 3.580 million tons in FY24).
Total dispatches: 8.962 million tons (9.96% increase over FY24).

Cement Industry’s Expectations from the Government

A spokesperson for the All Pakistan Cement Manufacturers Association (APCMA) stated that the cement industry expects government intervention in the upcoming budget to support higher capacity utilisation.

Key areas where industry players seek support include:

Reduction in Energy Costs: High fuel and electricity prices impact production costs.
Infrastructure Development Projects: Government spending on construction and infrastructure will drive demand.
Export Incentives: Facilitating exports will help balance the slow domestic sales.
Tax Relief & Incentives: Lowering duties on raw materials can enhance industry profitability.

FAQs About Pakistan’s Cement Industry

1. Why did domestic cement sales not grow as expected in February 2025?

Domestic demand remained sluggish despite the seasonal uptick due to higher construction costs, slow government spending, and reduced private-sector investment.

2. What factors contributed to the rise in cement exports?

The 34.30% rise in exports was mainly due to favorable international demand and increased competitiveness of Pakistani cement in global markets.

3. How have North and South cement mills performed differently?

North-based mills saw higher domestic demand but suffered in exports.
South-based mills experienced strong export growth, compensating for a decline in local sales.

4. What role does the government play in the cement industry’s growth?

The government influences the industry through infrastructure projects, tax policies, and energy pricing. Industry-friendly measures in the budget can boost growth.

5. What is the future outlook for the cement industry in Pakistan?

While export growth remains strong, domestic demand needs policy support. Industry experts anticipate government initiatives in the FY26 budget to stimulate demand and improve profitability.