Pakistan’s cement industry may be staging a quiet comeback. Four months into FY26, total cement offtake has climbed 16 percent year-on-year, bolstered by both domestic and export demand.
In recent years, exports growth has frequently overshadowed the domestic market, even as the latter continues to dominate the sales mix. But the script is changing and domestic markets are shaking off a prolonged period of subdued activity.
Despite floods, domestic markets are being revived due to the resurgence of development spending. In 4M, domestic offtake rose 18 percent year on year with exports growing by a moderate 6 percent.
The domestic recovery may not be a fluke. Demand last year was weighed down by floods and economic uncertainty, and this year, a more stable macroeconomic environment along with other catalysts may support a return to growth, with full-year domestic demand projected to expand between 10–15 percent.
A major catalyst may come in the form of housing demand with State Bank of Pakistan’s new affordable housing finance scheme, “Mera Ghar Mera Ashiana”, which revives a mark-up subsidy for first-time home buyers, similar to the “Mera Pakistan Mera Ghar” program halted in 2022.
Coupled with lower withholding taxes on property transactions, the schemewill spur home ownership and new construction, lifting cement consumption further in the coming months. Already, monthly domestic dispatches are averaging close to their FY21 and FY22 peak levels.
On the export front, the outlook is not any less encouraging. Cement and clinker exports are maintaining a 20 percent share in total dispatches, up sharply from the lows of FY22. The Port Qasim Authority’s expansion of cement handling capacity will support outbound shipments.
For cement makers, exports will continue to serve as a stabilizing force, helping cover fixed costs during periods of domestic weakness. As these producers gain better access to international markets, exports are poised to become an increasingly strategic component of overall demand.
Even as demand improves though,the low capacity utilization at 60 percent looms large; well below the optimal range of 75–80 percent.Though cement companies have held off on that uptil now, but this surplus capacity mightsoon intensify price competition, particularly in the northern region where producers are vying aggressively for market share. This underutilization also delays the incentive for new capacity additions, signaling that the industry is still operating below its expansion threshold.
While total demand remains about 12 percent short of its FY21 peak, the recovering domestic sales, steady exports, and restrained price inflation together could mark FY26 as a stabilizing year for the cement sector. If current momentum continues, the industry may end the year with 51-52 million tons in total dispatches, still lower than the peak of FY21 and FY22 but perhaps a sign that after years of volatility, Pakistan’s cement industrywill berebuilding its foundation.
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