Kohat Cement to enter the real estate development market

Kohat Cement Company Limited (PSX: KOHC) has announced that it will venture into Pakistan’s real estate sector by incorporating a wholly‑owned subsidiary dedicated to property development.

In a notice dispatched to shareholders and published by the Pakistan Stock Exchange on 11 July 2025, the Board of Directors confirmed that the new entity will “undertake real estate development and all allied works” with an initial paid‑up capital of Rs750 million. The company has not publicly stated what the subsidiary will focus on developing.

The disclosure marks the second time a major cement producer in Pakistan has formally carved out a separate platform for property development. Lucky Cement has been a highly successful real estate developer with its Lucky One Mall in Karachi and now Lucky Mall Lahore.

Kohat Cement’s entry into property development represents a classic case of downstream vertical integration. Cement is the single largest bulk input in most construction projects, accounting for roughly 20 percent of structural costs. By aligning its manufacturing operations directly with real estate development, Kohat can internalise its own demand, stabilise kiln utilisation rates, and hedge against cyclical slowdowns in the standalone cement market.