Kohat Cement Company (KOHC): Growing Carefully, But With Shareholders in Mind

Kohat Cement Company (KOHC) isn’t rushing into rapid expansion, and that’s a good thing. The company is scaling up strategically, focusing on demand-driven growth and shareholder value.

Let’s break down how KOHC is balancing smart expansion with smart capital decisions.

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Expansion with caution

KOHC is already one of Pakistan’s largest cement companies, ranked 7th in the country, with a production capacity of 5.2 million tons per year.

Here’s a quick look at their production setup:

• 3 grey cement lines
• 1 white cement line

Its most recent expansion was in FY20, when it added a 2.3 million ton grey cement line.

To boost efficiency, KOHC also completed a technical upgrade recently:

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• The third production line (from 2005) was upgraded from 6,700 tons/day to 7,064 tons/day
• This was done by optimizing the pyro-process, a key step in cement production

New plant coming in Khushab

KOHC isn’t stopping there. It has announced plans for a new cement plant in Khushab, with a capacity of 7,800 tons per day.

Infrastructure work at the site has already started.
However, the company is being cautious; the final order for plant machinery will only be placed once market demand picks up.

Estimated investment (CAPEX) for this project:

• PKR 35–40 billion
• Will be funded 50% by debt and 50% by equity
• That’s about USD 50–57.5 per ton, in line with industry standards

This cautious approach ensures the company avoids unnecessary risk while staying ready to grow when the time is right.

Committed to shareholder value

KOHC isn’t just focused on expansion; it’s also making deliberate moves to reward shareholders and improve stock value.

Share Buybacks

KOHC has completed two major buyback programs:

1. Jan 2023:
   • Bought back 5 million shares at an average of PKR 173.9/share
2. Oct 2024 – Apr 2025:
   • Bought back 12 million shares at an average of PKR 392.4/share

These buybacks reduce the number of shares in the market, which can boost the value of remaining shares, a positive for shareholders.

Stock split to increase accessibility

In another major move, KOHC recently announced a 5:1 stock split. That means:

• 1 share becomes 5
• Total shares increase from 183.8 million to 919.3 million

Why this matters:

• It improves liquidity (easier to buy/sell the stock)
• It makes the stock more affordable for small investors
• It helps in better price discovery, especially for institutional investors

Final thoughts

Kohat Cement is taking the long view:

• Expanding production capacity without rushing
• Improving the efficiency of existing assets
• Using real estate for new revenue (see earlier post)
• Increasing investor returns through buybacks and stock splits

For investors looking at steady, strategic players in the cement space, KOHC is one to watch.

Source: Insight Securities

⚠️ This post reflects the author’s personal opinion and is for informational purposes only. It does not constitute financial advice. Investing involves risk and should be done independently. Read full disclaimer →