Pakistan's cement industry posted a strong rebound in FY26, with total dispatches reaching 50.58 million tons, an increase of approximately 8% year-on-year, according to data from AKD Securities and Arif Habib Limited (AHL). The recovery was fueled by a revival in construction activity and lower average policy rates, which boosted domestic demand.
Domestic Sales Surge
Local cement sales grew 9% year-on-year to 41.5 million tons in FY26, as highlighted by Usama Rauf of AKD Securities. In June 2026 alone, domestic dispatches surged 27% year-on-year to 3.54 million tons, while cumulative FY26 local sales stood at 41.57 million tons, up 10%. Overall sales in June increased 18.4% year-on-year to 4.33 million tons, driven by a low base effect from Eid holidays in the same period of the previous year, noted AHL.
Regional Performance
Northern region dispatches rose 16% to 3.01 million tons in June, while southern region volumes increased 23% to 1.31 million tons. Industry-wide capacity utilisation improved to 59% in FY26 from 56% in FY25, reflecting higher domestic offtake. Utilisation in the North increased to 53% from 49%, while southern mills saw utilisation rise to 84% from 79%, supported by a 9% spike in sea-based exports.
Government Support and Housing Scheme
The FY27 federal budget is expected to provide further impetus through higher Public Sector Development Programme (PSDP) spending, property tax relief, and expansion of the Prime Minister's Apna Ghar housing scheme. A major positive is the inclusion of Non-Banking Finance Companies (NBFCs) in the programme, widening access to subsidised housing finance. Housing and investment finance companies can now extend loans up to Rs10 million, while microfinance companies can offer up to Rs5 million, with a subsidised 5% mark-up for the initial 10 years. This initiative targets underserved middle and lower-income segments and, combined with the abolition of Section 7E and other property incentives, is likely to accelerate home ownership and cement consumption.
Company-Wise Performance
Major cement players posted healthy growth. Lucky Cement's total dispatches rose 31% year-on-year to 0.91 million tons in June, driven by a 40% jump in local sales. For FY26, Lucky Cement recorded sales of 9.668 million tons, up 4%. Fauji Cement saw June dispatches increase 11% to 0.48 million tons. DG Khan Cement's volumes grew 12% to 0.39 million tons. Kohinoor Cement and Pioneer Cement also reported strong double-digit growth. Power Cement stood out with a 60% year-on-year rise in June dispatches to 0.28 million tons. Maple Leaf Cement's volumes were slightly down in June but showed 5% growth for the full year.
Outlook and Risks
Both AKD and AHL maintain a constructive outlook. AHL expects momentum to strengthen on recovering economic activity, FY27 budgetary relief for construction, and potential improvement in export demand. AKD projects local cement offtake to grow around 8% in FY27, driven by lower financing rates, easing construction costs following de-escalation of Middle East tensions, and favourable fiscal policy. Falling coal prices post-US-Iran ceasefire will support sector margins. However, as AKD notes, "a re-ignition of the conflict and a renewed spike in oil and coal prices remain key risks to our demand and margin outlook."
Cement prices have shown gradual recovery in both North and South regions. With monetary easing, fiscal support, and expanded housing finance, the industry is well-placed to sustain its upward trajectory, contributing to broader economic recovery through construction and allied sectors.
