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Cement industry – opportunities and challenges for the sales team

Cement industry – opportunities and challenges for the sales team

Cement industry of Pakistan is experiencing consistent growth since 2011. This growth is attributed mainly to increase in national consumption, thanks to various infrastructure projects including CPEC. National Compound Annual Growth Rate of cement has been 7% in the last 5 years and 10.5% from the year 2014 to the year 2017. This trend of growth in the local consumption is expected to continue with an expected growth rate of 10% during the current year and 3 years CAGR of 8 to 10% up to the year 2021.

Exports of cement had a steep decline and touched rock bottom of 4.5 million tons in 2016-17 as compared to about 11 million in 2008-09 and 2009-10. Export market does not present a lucrative scope due to comparatively low international market prices coupled with tariff and non-tariff barriers imposed by various countries.

Increase in local consumption of cement is due to housing, provincial infrastructure and big projects associated with CPEC. About 50% of this growth is indebted to infrastructure projects and CPEC related construction work. As such, this demand is time specific and can slow down after 2 to 3 years with the completion of major ongoing and upcoming projects. Therefore, the demand is expected to be stagnant after it reaches about 53-55 million tons per annum in the year 2021.

Per capita consumption of cement in Pakistan stands around 200 kg, which is low as compared to 250 kg in India and global per capita consumption of cement of 500 kg. We expect cement demand to touch 250 kg by the year 2021 making it 54 million tons per annum. However, if the Gwadar Port project goes successful as per the expectations, the local demand can climb up to 60 million tons per annum.

Cement industry is also going through various expansion projects and if all the expansion plans go practical, production capacity will increase to 70 million tons per annum by the year 2021.

This is good market scenario for the industry and everything seems going hunky-dory for the sales teams. However, even smoothest of the sailing in a well-designed and efficient ship can have unexpected jolts, I am sure everybody knows about Titanic and iceberg story. Hence, the success lies in staying attentive with contingency plans to cope with sudden unexpected market icebergs. Moreover, the good demand market scenario can be useful in improving your current market position to strengthen your company and product image contributing to the overall profits of the company.



Soft markets having consistent market demand provides an excellent opportunity for the sales people to redefine and strengthen their brand by correcting shortcomings and inadequacies of the sales strategy. These shortcomings may have developed throughoutthe unstable market during uncertain and low demand, severe competition and/or price war periods. Stable market now provides you an opportunity to redress all those wrongs that haveineptly or inevitably inflicted your brand and prepare for the future more aptly. For this, I would suggest the following to the sales teams, which I refer to as Sales Review and Evaluation Process (SREPS) making it easy to remember these points:

Promising market situation for a product is always a boon for the company and for the sales people as well. However, remember only constant in this universe is change and market situation is not an exception to this. Efficient use of the market opportunities and ability to plan and prepare for the upcoming challenges by developing contingency plans would dictate the success in tight market situation. There will be winners and there will be losers in the tough market, which one you going to be? Points mentioned above might help you take the challenges with more confidence.

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