FY26 cement dispatches rise as domestic demand drives growth

Pakistan's cement industry ended FY2026 on a stronger note, with total dispatches rising 7.6% year-on-year to 50.58 million tonnes, driven primarily by a rebound in domestic demand.

 

Local cement dispatches climbed 10% to 41.57 million tonnes, adding nearly 3.8 million tonnes during the fiscal year, while exports declined 2.1% to 9.01 million tonnes, reducing their share of total dispatches to around 18% from nearly 20% a year earlier.

 

The recovery marks a shift in the sector's sales mix after several years in which producers relied on exports to offset weak domestic construction activity caused by high interest rates, inflation and lower development spending.

 

Regionally, North-based producers recorded a 7.5% increase in total dispatches, supported by an 11% rise in local sales, although exports more than halved due to the closure of the Afghanistan border. South-based dispatches increased 7.8%, with exports rising 9% on the back of access to international seaborne markets.

 

In June 2026, total cement dispatches rose 18.4% year-on-year to 4.33 million tonnes, while domestic sales surged 27%. However, exports fell 9%, reflecting continued challenges in northern markets.

 

Despite the recovery, the industry continues to face significant excess capacity. With installed production capacity approaching 80 million tonnes, more than one-third remained unutilised during FY2026.

 

Looking ahead, the sector expects 7-8% growth in dispatches during FY2027, supported by lower interest rates, higher public development spending, housing incentives and the PM Apna Ghar programme. However, industry prospects remain contingent on sustained infrastructure spending, improved affordability and the reopening of the Afghanistan border, which is critical for restoring northern exports and access to lower-cost Afghan coal.