Fauji Cement boosts sales, explores new export markets

Fauji Cement Company Limited (FCCL) has reported a 5.7% year-on-year growth in cement sales during FY25. It outlines expansion in exports, energy efficiency, and dividend payouts at its corporate briefing held on September 25, 2025.

Fauji Cement Company Limited (FCCL) conducted its FY25 corporate briefing session, where management discussed financial performance and future outlook.

In FY25, the company acquired a polypropylene bag manufacturing plant in Hattar with a production capacity of 72mn bags per annum. Currently, about 90–95% of the company’s packaging requirements are met through this plant, resulting in savings of around PKR 4/bag compared to outsourced procurement.Pakistan Cement Sales up in Nov

Regarding the unsecured loan from Fauji Foundation, management stated that they have started accruing a 10% markup, and no decision has been taken to convert it into ordinary shares.

FCCL sold 5.37 million tons of cement in FY25, registering a growth of 5.7% YoY vs.  FY24. In this, Local sales increased by 5.5% YoY to 4.81 million tons, and export sales increased by 7.7% YoY to 0.56mn tons.

FCCL remains the largest exporter to Afghanistan, while also highlighting Sri Lanka and Bangladesh as potential markets. The company may explore sea exports from its DG Khan site, though the plant mainly serves southern Punjab.

FCCL’s capacity utilization in FY25 stood at 51% compared to 55% in FY24, though it remained 3% higher than the industry average. In 1QFY26, utilization improved to around 57–58%.

FCCL’s Retention prices for FY25 hover around Rs15.5k/ton -16k/ton, whereas export retention prices are around Rs10.5k/ton.

For FY26, management expects local demand growth to hover around 4–5%, with combined growth including exports, reaching 8–9%. The impact of recent floods, however, is yet to be fully assessed. Regarding drivers of domestic demand, management mentioned that housing accounts for around 60–75% of cement demand, while the remaining share comes from commercial and infrastructure activities.

FCCL’s current power mix comprises 41% grid and 59% in-house generation. The current grid tariff stands at around Rs31/KWh vs. Rs33/KWh in FY24.

Going forward company remains focused on reducing reliance on costly grid by increasing its in-house power generation. In FY25, the company added 15MW of solar energy.

The company uses a coal mix of 25% Afghan and 75% local coal (sourced mainly from Darra). In addition, alternative fuels account for around 7% of the total fuel mix.

Currently, Afghan coal prices are hovering around PKR 38–39k/ton, while local coal is available at PKR 35–37k/ton. The cost of alternative fuels, however, continues to fluctuate depending on the source.

Regarding royalty, management said the industry has obtained a stay order and is under litigation currently, but they have been recording the expense, so there is no cash outflow. To highlight, royalty per ton increased from Rs250/ ton to Rs 1,232/ton as the Punjab Govt changed the royalty mechanism from a fixed PKR 250/ton to 6% of the ex-factory price.

While commenting on payout, management said they have increased their dividend payout by 25% compared to last year, resuming its regular dividend distribution practice post-expansion phase. FCCL is trading at FY26E/27F PE of 7.7/6.4x respectively.