Investor Presentaiton

Cement • Demand Side | Price Dynamics PACRA Cement prices are a function of the market demand supply dynamics. Variations in prices are generally dependent upon the behavior of major cost components of cement production, including coal prices, exchange rate, fuel costs and freight charges. Export of cement to Indian market stopped after the imposition of heavy duty on Pakistani products by Indian government at start of FY20. Decreased exports coupled with increased capacity in the north region increased pressure on the prices. Price in the region remained further under pressure after the imposition of covid-19 lock down in last quarter FY20. Uptick in construction activities post covid-19 lock down supported the cement prices. In the wake of improve capacity utilization, the prices in the are expected to remain stable in the 2HFY21. As mentioned in table below, clinker is exported at very low price as compare to cement despite being advanced stage product, if not finished good. Export of clinker is not very profitable for the companies on stand alone basis but it come with other additional benefits like increased capacity utilization and availability of export refinance facility at subsidized rates. Price Trend (PKR/bag) Comparison of Local and Export Prices Avg Prices in PKR/bag FY17 FY18 FY19 FY20 North 800 700 600 500 South 400 Export Clinker 300 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Export Cement -North Region South Region 539 527 581 526 576 586 619 673 405 318 391 397 457 451 525 546 Note: Export prices are adjusted for sales tax, FED and others. Source: APCMA, PBS 11

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