Cement industry updates: India and Pakistan

India

In India, the demand outlook for FY15 appears to be more favourable, primarily due to the government’s new focus on infrastructure spending outlined in the most recent Budget.

Sabyasachi Majumdar, Senior Vice-President of ICRA Limited, an independent and professional investment information and credit rating agency, noted that a number of initiatives have been announced in the Union Budget that promote both infrastructure and housing investment. Urban and rural housing demand, and therefore demand for cement, is set to rise due to increased provision under the Rural Housing Fund and interest deduction on housing loans. Furthermore, the government’s attempts to promote investment in infrastructure, such as roads, airports and ports, are also expected to boost cement demand. Majumdar further stated that cement manufacturers would benefit from a rise in long-term funding availability for infrastructure projects, which is likely to result in increased investment in these sectors.

In other news, a new report by CARE Ratings notes that the profitability of cement manufacturers is expected to improve in the current fiscal year as a result of higher realisation due to improved prices. Although producers may witness a partial reversal in cement price hikes in the near-term (due to the monsoon season), the report forecasts that the average cement price in FY15 will be higher compared to FY14.

Pakistan

Exports to Afghanistan fell by approximately 8.84% in July – December of FY14, compared to the same period a year earlier. Data released by the Ministry of Commerce noted that exports declined to around US$927.577 million during the reporting period, from US$1.017 billion in July – December of FY13. The value of exports to Afghanistan reached US$2.3 billion in FY13, compared to US$2.249 billion in FY12.

According to the figures, Pakistan’s exports to the US increased by 1.9% to US$1.908 billion, against US$1.872 billion recorded in the same period a year earlier. Similarly, exports to China improved by 1.96% from US$1.291 billion to US$1.317 billion in July – December of FY14. Meanwhile, exports to the UAE fell by some 29.72% to US$1.035 billion from US$1.472 billion in July – December of FY13.

Edited from various sources by Rosalie Starling

Read the article online at: https://www.worldcement.com/asia-pacific-rim/23072014/cement-industry-updates-india-and-pakistan-153/