Cements: Dark Clouds
- Our channel checks confirm that Lucky
Cement, the largest cement manufacturer in Pakistan, has resigned from APCMA.
- We believe that this may be in
connection with the recent power tariff increase and disagreements among cement
manufacturers related to passing on of cost increase.
- This may have detrimental effect on
cement price unless issues among APCMA members are resolved.
- Historically speaking,
issues among cement
manufacturers led to
price wars and
a risk of
that happening again
might be evident from recent events.
- We advise caution at current levels
and will revisit our investment case on the cement sector.
- We have done a sensitivity of cement
price on earnings of Elixir’s cement universe below.