Sri Lanka’s Tokyo Cement sees demand recovery boost volumes
Daily Mirror: Tokyo Cement Group posted a sharp pickup in third-quarter revenue, riding a recovery in construction activity, though profitability came under pressure from pricing adjustments, higher input costs and the financial impact of recent expansion investments.
The cement manufacturer reported a turnover of Rs. 14.52 billion for the quarter ended December 31, 2025, up 25 percent from Rs. 11.64 billion a year earlier, supported by volume growth that outpaced the broader industry.
Profit after tax, however, fell to Rs. 332 million from Rs. 1.01 billion, reflecting a mix of lower selling prices, rising raw material costs compounded by currency depreciation, and higher depreciation and interest charges linked to capacity expansion in Trincomalee and the acquisition of a vessel to strengthen coastal distribution.
The quarter saw construction activity maintain strong momentum, with the Sri Lanka Purchasing Managers’ Index (PMI) for construction remaining elevated through October, driven by demand from hospitality, housing and condominium projects alongside regional infrastructure development. That trajectory was interrupted by Cyclone Ditwah in late November, which triggered flooding and landslides and caused an estimated $ 4.1 billion in damage to buildings, agriculture and critical infrastructure, according to the World Bank’s GRADE assessment. Industry activity slowed through December due to cyclone-related disruptions and the holiday period.
Despite the rupee weakening by about 6 percent against the dollar, macroeconomic conditions remained broadly resilient, supported by stronger revenue collection, tourism inflows and remittances. Export earnings rose 7 percent year-on-year to $ 12.99 billion from January to September 2025, while remittances increased 20.7 percent to $ 7.19 billion in the first eleven months, helping sustain both the primary fiscal surplus and the external current account surplus.
OSL take:
The ongoing expansion in Sri Lanka’s construction industry has resulted in an increase the demand for goods and services related to the industry. Apart from the technical and technological developments and expertise to meet the growing demand of the local construction industry, there has been a marked growth in the manufacturing industry related to the overall construction industry as well. While Sri Lanka has launched development programmes inline with the country’s development agenda, the cyclonic destruction caused last November and the ongoing rebuilding work has also increased the construction industry. It is in such a backdrop that a cement manufacturing company has recorded an increase in demand. However, the overall expansion in the country’s construction industry has presented many direct and indirect business/investment opportunities covering not only the industry but related sectors as well. With Sri Lanka on a path to becoming a hub in the South Asian region and the current economic expansion, the country’s construction industry is also on a steady growth path ensuring lucrative business/investment opportunities for foreign businesses/investors on the lookout for such in Sri Lanka.
| Article Code : | VBS/AT/20260213/Z_2 |