Fauji Cement Company Limited (FCCL), is a public limited company incorporated in Pakistan on November 23, 1992. The Company is listed on Pakistan Stock Exchange since October 9, 1996.

The Company commenced operations in 1997 with the start of its first plant (Line I) at Jhang Bahtar (JB), equipped with a European cement manufacturing line and a clinker production capacity of 3,700 TPD. In 2012, commercial production began on a second line (Line II) at JB, with a clinker capacity of 7,200 TPD, also of European origin. In 2018, Line II's capacity was successfully enhanced from 7,200 TPD to 7,600 TPD, increasing the total capacity to 10,600 TPD at the JB site. Following the successful merger with Askari Cement Limited in July 2021, which added capacities of 5,670 TPD at Nizampur and 3,675 TPD at Wah, along with the completion of Brownfield project in Nizampur and a Greenfield project in D.G. Khan with a capacity of 6,500 TPD each, the Company has emerged as the third-largest player in the cement industry, with an installed capacity of 10.6 million tons per annum (MTPA).

The Company’s primary activity is the manufacturing and supply of various types of cement, including Ordinary Portland Cement (OPC), Low Alkali Cement (LAC), Sulphate Resistant Cement (SRC), Low Heat of Hydration Cement (LHC), Portland Composite Cement (PCC/Green Cement), and the Tile Bond. The Company operates across four locations: Attock (2 lines), Nizampur (3 lines), Wah (1 line), and D.G. Khan (1 line). It is recognized as one of Pakistan's leading producers of high-quality cement.

FCCL is majority-owned by its sponsor, Fauji Foundation, and other group companies (67%), while the remaining shares are held by financial institutions (17%) and the general public (16%).

FCCL’s ownership structure reflects strong institutional backing from its sponsor, the Fauji Foundation. This stable and committed ownership has been a key driver of the Company’s growth and success. Since its inception, the consistent support of its shareholders demonstrates a shared vision and alignment with the Company’s objectives.

Fauji Foundation (also known as FF) is one of the largest business conglomerates in Pakistan, operating with the motto "Earns to Serve" to support the welfare of ex-servicemen and their dependents. Established in 1954 as a charitable trust, Fauji Foundation demonstrates exceptional business acumen through strategic investments across diverse sectors, including agriculture, infrastructure, energy, food, and financial services.

Fauji Foundation, one of Pakistan's largest and most diversified business conglomerates, exemplifies exceptional financial resilience. With a broad portfolio it secures strong revenue streams and fosters sustainable growth. The Foundation's strategic investment approach and long-term vision play a vital role in ensuring FCCL's stability.

The overall control of the company vests in eight member’s board of directors - including the Chief Executive – Mr. Qamar Haris Manzoor. The board comprises of 4 Non-Executive Directors and 3 Independent Directors.

The Board of Directors (BoD) of FCCL comprises distinguished professionals with extensive expertise in finance, governance, public administration, and various industries. Their collective experience enables strategic oversight and ensures strong governance, which has been instrumental in driving the Company’s growth and progress.

Lt Gen (Retd) Anwar Ali Hyder, HI(M), serves as Chairman of Fauji Group companies, including FCCL, and has been the Managing Director & CEO of Fauji Foundation since April 2024. He brings extensive experience in strategic planning, organizational leadership, and administration. His illustrious career includes serving as Principal Staff Officer to the Chief of Army Staff in the role of Adjutant General of Pakistan. Additionally, he has contributed to national economic initiatives as a member of the Apex Committee of the Special Investment Facilitation Council (SIFC). Recognized for his exceptional leadership, he has received the Chief of Army Staff Commendation Card and the prestigious Hilal-e-Imtiaz (Military) from the President of Pakistan. His leadership and expertise play a pivotal role in shaping FCCL’s strategic direction.

The FCCL Board comprises seasoned professionals with expertise in fiscal and macroeconomic policy, corporate governance, strategic leadership, mergers and acquisitions, and technical innovation. These leaders hold prominent positions in reputable organizations and actively contribute to FCCL’s governance by serving on key committees, including Audit, HR&R, Investment, and ESG. Their diverse perspectives and unparalleled knowledge strengthen FCCL’s strategic oversight, ensuring robust governance and guiding the Company toward sustained growth and success.

FCCL has established a governance structure aligned with industry best practices and in compliance with the Code of Corporate Governance. The Board of Directors (BoD) plays a crucial role in setting the Company's strategic direction while ensuring the implementation of rigorous risk management and internal control systems.

To strengthen governance further, the BoD has formed four key committees: 1) Audit committee 2) Human resource & Remuneration Committee (HR&R), 3) Investment Committee and 4) Environmental, Social and Governance (ESG) Committee. These committees are instrumental in reviewing key matters and providing recommendations to the BOD to support sound and effective governance.

In FY24, the Board of Directors (BoD) convened six meetings, while the Audit Committee held seven meetings. The HR&R Committee and Investment Committee each held one meeting, and the ESG Committee convened twice. Attendance of the members across all meetings remained satisfactory.

As a publicly listed company, FCCL’s Board is dedicated to upholding the highest standards of transparency, accountability, and ethical conduct. To foster effective communication with stakeholders, the Company ensures the timely preparation of financial statements with all necessary disclosures, in compliance with Pakistan Stock Exchange (PSX) rules and Securities & Exchange Commission of Pakistan (SECP) regulations.

M/s A.F. Ferguson & Co., Chartered Accountants, serve as the Company’s external auditors. For FY24, the auditors have expressed an unqualified opinion on the financial statements, reflecting the Company’s adherence to sound financial reporting practices and regulatory compliance.

The Company operates under a functional vertical structure, with specialized departments managing distinct business activities. Employees within each department report to their respective managers or functional heads, who, in turn, report directly to the Chief Executive Officer. The Board of Directors provides oversight and sets the Company's strategic direction. The organizational structure is divided into different functions. Key functions are; 1) Sales & Marketing, 2) Plant Operations 3) Finance & Accounts. 4) Internal Audit 5) Human Resource 6) Legal & Corporate Affairs and 7) Management Information System. The internal audit department reports to the Audit Committee in line with the Code of Corporate Governance.

Mr. Qamar Haris Manzoor, the CEO, holds a master’s degree in Chemical Engineering from the United States and brings over 36 years of extensive experience in plant and project management. He is supported by a team of highly qualified and competent professionals, each leading their respective departments with expertise and dedication.

FCCL ensures efficient operations through a clear segregation of duties, well-defined reporting lines, and a structured hierarchical framework that facilitates informed decision-making. Management meetings are conducted frequently to ensure the seamless flow of processes and address any operational bottlenecks. Key discussions and decisions are documented in meeting minutes to maintain transparency and accountability.

FCCL has implemented SAP S/4HANA, the latest ERP system, to enhance controls and improve business efficiency through accurate and timely reporting. This advanced technology infrastructure, supported by well-designed and effectively implemented policies and procedures, enables management to generate a variety of regular and customized reports at different intervals (daily, weekly, monthly, and yearly). These reports cover key areas such as sales, purchases, inventory, general ledger, payroll, costing, budgeting, preventive maintenance, and other critical financial metrics.

FCCL places a high priority on effective governance of risk and internal controls. To ensure proactive identification, assessment, and mitigation of risks, the Company has established a comprehensive policy framework that includes regular risk assessments, internal control evaluations, and ongoing monitoring mechanisms.

As part of this commitment, FCCL has a dedicated in-house Internal Audit function. The Head of Internal Audit reports directly to the Audit Committee, ensuring independence and accountability. This function is instrumental in monitoring the implementation of financial controls and procedures, as well as assessing and managing risks associated with the Company’s operations and new projects. By maintaining a strong control environment and continuously enhancing risk management practices, FCCL safeguards its assets, optimizes operational efficiency, and upholds transparency and accountability across the organization.

The local cement industry faced significant challenges throughout FY24, primarily due to the country's economic difficulties, including high inflation, soaring interest rates, and reduced developmental activity. Additionally, political instability led to lower Public Sector Development Program (PSDP) spending, compounding the challenges faced by the construction sector, which was already struggling with rising input costs. Despite these challenges, the cement industry in Pakistan witnessed marginal growth of ~1.6%, reaching 45.3mln MT during the year ending June 30, 2024, compared to 44.6mln MT last year. Although the local sale volumes declined by 5% (FY24: 38.2mln MT, FY23: 40.0mln MT), the overall surge was driven by a significant rise in export dispatches of 56%, reaching 7.1mln MT, up from 4.6mln MT last year. A similar trend was witnessed during 1HFY25, with the local dispatches recording a decline of ~10.5% (1HFY25: 18.12mln MT, 1HFY24: 20.24mln MT), while export dispatches grew by ~31% (1HFY25: 4.81mln MT, 1HFY24: 3.66mln MT). Despite the decline in sales volumes, the local cement manufacturers are witnessing a rising trend in their recorded revenues due to the higher prices reflecting the increase in the cost of production that is being passed on to the consumers. As a result, cement manufacturers have successfully maintained their margins. The industry also witnessed a rise in installed capacity, which now stands at approx. 85mln MT per annum. However, based on the stressed demand, the capacity utilization remained between 50-55% during FY24. Going forward, FY25 brings some relief for the industry in the form of consistent reduction in policy rates, declining inflation, a stable exchange rate, and gradual increases in SBP reserves along with political stability. However, the development activity in the form of construction projects to stimulate the economy is still on hold.           

Fauji Cement is the third-largest player in the local cement sector in terms of installed manufacturing capacity. During FY24, the Company achieved the highest capacity utilization in the industry at approximately 55%, securing around 11% market share.

The Company serves two primary customer segments:

1. Dealers: Fauji Cement has an extensive network of dealers across Pakistan, which accounts for the majority of local dispatches.
2. Projects: Direct dispatches are made to projects across the country.

With operations at four strategically located sites, Fauji Cement efficiently caters to nearby markets, ensuring optimized logistics and customer service.

During FY24, FCCL achieved cement dispatches of 5.1mln MT (FY23: 4.8mln MT), comprising 4.6mln MT in domestic sales (FY23: 4.4mln MT) and 0.5mln MT in exports (FY23: 0.4mln MT), primarily to Afghanistan. This resulted in net revenues of PKR 80,026mln (FY23: PKR 68,069mln), reflecting an 18% growth driven by higher pricing, despite a decline in overall volumes. Local sales revenue increased by 19% due to price adjustments to offset rising input costs, while export revenue grew by 25%, supported by higher dispatches and PKR devaluation. In 1HFY25, net revenues reached PKR 47,844mln (1HFY24: PKR 40,352mln), driven by stable pricing and improved dispatches to 2.81mln MT as compared to same period of previous year (1HFY24: 2.58 mln MT).

The Company has consistently improved its margins through effective cost control measures and better retention prices. This improvement is primarily driven initiatives undertaken by the management. Key contributors include increased use of local coal, adoption of alternative fuels, higher reliance on self-generated power, and fixed cost optimization. As a result, the Gross Profit Margin improved to 35% in 1HFY25 (FY24: 32%, FY23: 30%, 1HFY24: 32%). Net Profit Margin also showed improvement, reaching 15.2% in 1HFY25 (FY24: 10.3%, FY23: 10.9%, 1HFY24: 13.1%), supported by the timely repayment of project-related loans, reduced leverage, and the positive impact of declining policy rates on the bottom line.

FCCL has strengthened its position as the third-largest cement producer in the local market with the completion of its Greenfield expansion project in D.G. Khan, bolstering its presence in the South region. The Company remains focused on cost optimization and sustainability, enhancing its renewable energy portfolio. In FY24, FCCL increased its waste heat recovery capacity to 64.5 MW and expanded its solar capacity to 52.5 MW through installations at its DG Khan and Nizampur plants. Plans are underway to further boost solar capacity to 67.45 MW by FY25 with additional projects at FCCL (N) and FCCL JB.

The Company also prioritizes reducing its carbon footprint by substituting coal with alternative fuels such as biomass and tire-derived fuel, cutting 112,790 tons of CO2 emissions in FY24, with a target of over 200,000 tons in FY25. Additionally, FCCL achieved 0% groundwater extraction for industrial use in FY24 by implementing rainwater harvesting and wastewater recycling initiatives. These efforts underscore FCCL's commitment to decarbonization, energy efficiency, and sustainable development.

During 1HFY25, FCCL's working capital requirements, represented by the net cash cycle (net working capital days), remained stable at 42 days (FY24: 42 days). The Company effectively manages its working capital needs through internally generated cash flows, supplemented by short-term borrowings (STBs), with utilization increased by  PKR 1,723 million as of December 2024.    

During 1HFY25 and FY24, FCCL's Free Cash Flow from Operations (FCFO) rose to PKR 14,747 million and PKR 22,467 million, respectively (1HFY24: PKR 11,450 million, FY23: PKR 17,322 million), driven by improved profitability. As a result, the Interest Coverage Ratio (FCFO/Finance Cost) improved to 4.9x in 1HFY25 from 4.1x in FY24, highlighting the Company’s enhanced ability to comfortably meet its finance costs due to stronger liquidity generation from operations.     

The Company’s leveraging has decreased due to the timely repayment of long-term project-related loans and reduced utilization of short-term borrowings. As of December 2024, the leveraging remains moderate at 30.6%, with short-term borrowings constituting approximately 10% of the total outstanding borrowings.