The second day of the Pakistan Cement Conference 2025 opened with a session on Kohat Cement, where Chief Financial Officer Khurram Shahzad detailed the company’s efforts to improve energy efficiency and position itself for long-term expansion,as a report by Topline Securities on the conference indicates.
Kohat Cement has recently completed installation of a 15.4-megawatt solar plant, with plans to increase total solar capacity to 20 megawatts. A 30-megawatt coal-fired captive power plant is also under development, expected to be operational by the end of fiscal year 2026. Company estimates suggest this will bring down electricity costs by Rs4 to Rs5 per unit, from current grid rates of Rs37–38 to coal-based generation costs of Rs20–21 per unit.
Shahzad also provided updates on the company’s greenfield cement expansion in Khushab, where infrastructure work is underway. However, final orders for plant and machinery have been deferred until a clearer recovery in local cement demand materializes. Kohat Cement has earmarked up to Rs20 billion for its share of the project cost and has already spent Rs4.7 billion on a share buyback, completed recently. About Rs2–3 billion is being allocated for the new power plant.
While further buybacks are off the table for now due to regulatory limits, Shahzad said the board may reassess next year. On dividends, no firm policy was indicated, with decisions remaining at the board level.
Operationally, the company has improved its energy mix, using more captive power and local coal compared to last year. As a result, production costs have fallen from Rs10,653 to Rs9,523 per ton, while average selling prices rose from around Rs14,900 to Rs16,300 per ton. Margins improved accordingly, rising from around 28% to nearly 42%. Shahzad added that Kohat has no immediate plans to introduce biofuels and is focused on increasing use of local coal.
He also pointed to regulatory uncertainty. A higher royalty on cement bags has not yet been implemented, but is expected to be included in the upcoming federal budget. A court ruling in Punjab on royalty laws could influence similar decisions for plants in Khyber Pakhtunkhwa, where Kohat operates.
Thatta Cement CEO Kamran Munir Ansari closed the second day of Topline Securities’ Pakistan Cement Conference 2025 by outlining a dual-path growth strategy, improved energy mix, and plans for diversification that have significantly lifted the company’s financial performance.
Thatta Cement is evaluating two key options to expand capacity. One is a 5,000 tons/day greenfield cement project via a joint venture with a Chinese partner. The company has signed a memorandum of understanding, with due diligence in progress. The estimated project cost is $100 million, to be funded 50% by debt, with Thatta holding a 51% equity stake and the Chinese partner 49%.
As an alternative, the company is considering acquiring a 51% stake in a listed cement company, with a deal value of around Rs21 billion.
In a diversification effort, Thatta Cement has imported 150 tractors from Minsk (Belarus) through a wholly owned subsidiary. About 4–5 units were sold in the third quarter of 2025, with the rest expected to be sold by fourth quarter of 2025. A local assembly agreement is being finalized to support long-term entry into the agricultural equipment sector.
Thatta Cement has achieved a strong recovery in gross margins, which improved from just 7–8% in FY23 to 28–29% in the first nine months of FY25. The improvement is attributed to full reliance on local Lakhra coal, costing Rs12,800–14,000 per ton, and a diversified internal power mix via Thatta Power, its subsidiary.
Thatta Power draws on a 9.9MW captive plant, 5MW of solar, 4.8MW of wind, and 3MW from waste heat recovery. The power is sold at a premium of Rs14–15 per unit over prevailing grid prices of Rs36–37 per unit, making the subsidiary profitable and enabling dividend payouts to the parent company.
Ansari noted the company has not yet paid a Rs791 million gas infrastructure development cess and is exploring legal options in line with other sector players.
He forecast local cement sales to remain flat in FY25, with a 10–12% market recovery expected in FY26, driven by lower interest rates and higher public sector development. Thatta Cement expects earnings growth of 50–55% in FY25 and a further 20–25% in FY26.
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