Fauji Cement expects up to 9% growth in cement demand for FY26

September 26, 2025 (MLN): Fauji Cement Company Limited (PSX: FCCL) expects overall cement demand to grow by 8–9% in FY26, supported by a 4–5% increase in local demand and sustained momentum from Afghanistan, where the company holds a leading 33% market share in cement exports, the company shared in its FY25 corporate briefing

It is also actively exploring new seaborne export opportunities, particularly targeting Sri Lanka and Bangladesh, through its DG Khan plant site.

The company emphasized that diversification into sea exports would reduce reliance on a single market and provide a new growth avenue as utilization levels improve.

FCCL has already established itself as Pakistan’s largest exporter to Afghanistan, but management sees seaborne markets as critical for long-term export sustainability.

Meanwhile, the company reiterated its focus on cost efficiency through higher local coal usage and expansion of in-house power generation, following the recent addition of 15MW solar capacity.

FCCL reported a profit of Rs13.3bn for FY25, a 62% jump from the previous year, dividend was proposed at Rs1.25 per share.

FCCL met nearly 95% of its packaging requirements internally, generating savings of Rs4 per bag compared to outsourced procurement.

Total Sales rose 5.7% YoY to 5.37 million tons in FY25, with domestic sales advancing 5.5% to 4.81 million tons despite a 3% contraction in industry volumes.

Exports grew by 7.7% to 0.56 million tons, strengthening FCCL’s position as the country’s largest cement supplier to Afghanistan with a commanding 33% market share.

Executives noted that while floods in Punjab and Sindh temporarily impacted September sales, demand is expected to normalize as reconstruction activity picks up. Housing remains the main driver of consumption, contributing nearly two-thirds of overall demand.

On the cost side, Waste heat recovery contributed 31%, solar 18%, fossil fuels 10%, while the grid supplied the balance. Coal sourcing leaned 75% towards local suppliers, with Afghan coal making up 25%. The company aims to push local coal reliance to 80–85% in FY26 to counter volatility in Afghan supply.

Meanwhile, royalty charges in Punjab rose sharply to Rs1,232 per ton after a shift from a fixed levy to 6% of ex-factory prices. Management disclosed that the case is under litigation in the Supreme Court.

FCCL, currently the third-largest cement producer in Pakistan with 13% market share, remains focused on strengthening vertical integration. In addition to the PP bag plant, management hinted at possible ventures into mining to secure coal supply.

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