Pakistan: Listed cement producers in Pakistan continued to deliver double digit profitability growth in the 2015 fiscal year, which ended on 30 June 2015. Their collective profits grew by 13% year-on-year to US$446m, with the improvement in profits caused by volume growth and lower energy costs.

Local cement demand remained strong, rising by 8.2% to 28.3Mt. This was due to higher public and private sector. The growth in profits was also supported by declining financial charges and falling selling and distribution expenses.

However, not all results were encouraging. Exports fell by 11.7% year-on-year to 7.2Mt due to weak demand from the Afghan market coupled with anti-dumping duty imposed by South Africa on Pakistani cement manufacturers.

Total industry dispatches are expected to grow by 8.8% to 38.6Mt in the fiscal year to 30 June 2016, primarily due to strong local demand expected from higher infrastructure spending and mega-projects including the China Pakistan Economic Corridor.

Analysts expect that manufacturing costs for the coming fiscal year will remain 'benign' for the industry and will be led by lower energy costs. Lower electricity charges and shift to more efficient sources like waste heat recovery will lead to further decrease in power and fuel costs for manufacturers. Moreover, imported coal prices are expected to remain at lower levels, owing to slowdown in China's growth, which will further drive up margins of cement manufacturers.