Pakistan has a well-developed cement industry with abundant raw material availability in the country. The country ranks amongst the top five exporters and 14th largest cement producer in the world. Cement is the prime ingredient used in the construction industry. Cement consumption has a direct correlation to economic growth and improvement in the living standards of society. The cement industry in Pakistan is currently thriving, thanks to the country′s booming construction industry and high demand for residential and commercial developments within the country. In Pakistan, infrastructure projects and the housing sector are the key drivers for consumption of cement. Going forward, consumption of cement from these two sectors is projected to increase.
The cement industry of the country can be divided into two separate regions; North & South Zone. North Zone includes provinces of Punjab, Khyber Pakhtunkhwa, Azad Kashmir, Gilgit-Baltistan and parts of Balochistan while South Zone includes provinces of Sindh and Balochistan. There are 19 and 5 cement units in the North and South Region, respectively. Players in the North Zone represent around 80% of the total rated capacity. Both North and South zones have their separate demand-supply dynamics.
Production capacity of cement manufacturers has more than doubled over the last decade to 45.6m MT/annum. As per research conducted by CEMTEC, Pakistan is amongst the three cement hotspots in the world where demand is expected to grow at its fastest. Given the favorable demand outlook and in order to enhance efficiencies, four cement manufacturers have announced expansion while other local cement manufacturers/Chinese investors have shown interest in expansion and setting new cement plants. Going forward, strong demand outlook and high margins is expected to continue to support profitability of the sector.