Cement Sector Recovery Driven by Export Surge

KARACHI: Pakistan’s cement industry has entered a gradual recovery phase as construction demand resurfaces after several sluggish years, with exports emerging as the primary growth driver.

During the first two months of FY26 (2MFY26), total cement offtake rose by 21 percent year-on-year. Domestic sales improved 14 percent, while exports—now accounting for 22 percent of total volumes—surged by 51 percent. This shift marks a notable change compared to previous years, when domestic demand dominated overall sales.

While year-on-year growth signals a positive trend, industry watchers remain cautious. Heavy floods across parts of the country have once again disrupted infrastructure and housing, likely curbing local demand in the coming months. However, reconstruction activities are expected to provide a lift to cement consumption later in the fiscal year.

Despite the export-led rebound, industry challenges remain. In FY25, overall capacity utilization slipped below 50 percent. Exports, while helping plants maintain operations and cover fixed costs, are generally sold at more competitive prices and carry higher distribution expenses, limiting profitability. As a result, manufacturers continue to rely heavily on stable domestic pricing strategies to sustain margins.

Looking ahead, the government’s FY26 development budget could support stronger domestic demand, provided fiscal stability allows planned projects to move forward. Industry expectations suggest that overall volumes may begin to resemble the highs seen in FY21 and FY22, though exports are likely to remain the backbone of the sector’s recovery.