Contribution of Cement Industry to Pakistan’s Economy - Bloom Pakistan

Contribution of Cement Industry to Pakistan’s GDP: Key Economic Impact

The contribution of cement industry in Pakistan plays a significant role in the country’s economy, contributing directly to the GDP, generating employment, facilitating exports, and serving as a backbone for the construction sector. Here’s a fully updated overview of its economic impact in FY 2024–25 and beyond.

FY 2024–25 Highlights

Installed Capacity & Utilization

As of June 2025, Pakistan’s cement industry reached an installed capacity of 84.58 million tons per annum (Mtpa).
Capacity utilization fell to 53%, reflecting challenges in domestic demand recovery despite growing exports.

Dispatches & Export Performance

Total dispatches stood at 33.99 million tons, down 1.5% year-on-year.
Domestic dispatches declined to 27.46 million tons (−6.6% YoY).
Exports surged to approximately 8 million tons in 11 months (July 2024–May 2025), marking a 29.7% YoY increase.
Export revenue crossed $287.9 million, easing the trade balance and supporting foreign exchange reserves.

Profitability

The cement sector recorded Rs 34.7 billion in profits in Q2 FY25, reflecting a 55% YoY increase.
EBITDA margins improved to 31.6%, supported by lower coal prices and improved energy efficiency.
Total net sales for Q2 FY25 reached Rs 196.8 billion, with overall capacity utilization at 61%.

Growth Outlook

AKD Securities forecasts 2.4% YoY growth in total dispatches for FY25, reaching around 45.3 million tons, driven by export momentum.

Broader Economic Impact in 2025

Direct Contribution to GDP

The cement industry continues to contribute approximately 0.85% of Pakistan’s GDP.
As part of large-scale manufacturing, it plays a key role in the sector’s total contribution of around 9–10% of GDP.

Role in the Construction Sector

Cement supports the 2.5–3% of GDP that comes from the construction industry.
It directly affects demand in steel, glass, tiles, and other related sectors.

Fiscal & Trade Benefits

Export-led performance helped offset the slowdown in domestic demand, contributing to national revenue through duties and corporate taxation.
The industry remains crucial to Pakistan’s strategy of increasing exports and stabilizing macroeconomic indicators.

Employment & Industrial Linkages

The sector supports over 150,000 direct and indirect jobs.
It drives a major chunk of allied industries and supply chains across transportation, mining, energy, and packaging.

2025 Outlook & Strategic Priorities

Export Diversification: Expansion into Africa, the Middle East, and Central Asia continues.
Energy Efficiency: Transition to alternative fuels and green technologies is helping improve margins.
Domestic Demand Recovery: Reliant on public infrastructure spending, housing schemes, and macroeconomic stability.
Risks: High FED/duties, inflation, exchange rate volatility, and inconsistent government policies.

Conclusion

Despite low domestic consumption, Pakistan’s cement industry remained profitable and resilient in 2025 due to strong exports and cost optimization. With a consistent ~0.85% share in GDP and essential linkages to construction, trade, and industry, the sector continues to be a key pillar of Pakistan’s economy. Policy support, export incentives, and sustainable practices will be vital to ensure the sector’s long-term growth and contribution to GDP. Stay tuned with Bloom Pakistan