Sri Lanka's Tokyo Cement Group to raise its capacity to 4Mta

Sri Lanka-based Tokyo Cement’s management hopes to complete the ongoing factory expansion project later this year, increasing overall cement production capacity from 3.1Mta to 4Mta. The new capacity will come online in the second half of this year. The project is expected to place Tokyo Cement in an advantageous position to capitalise on the industry revival as the economy rebounds. 

The company aims to solidify its market leadership as the nation’s largest cement manufacturer in Sri Lanka and has continued to invest in its capacity expansion plans by working closely with its Japanese technology partner, Mitsubishi UBE Cement Corp.  

Meanwhile, Tokyo Cement Group indicated that market challenges have led the group to see a decline in turnover in FY23-24, recorded at LKR49.8bn (US$166.6m), from the LKR56.5bn recorded in FY22-23. Similarly, there was a drop in profit after tax (PAT) during FY23-24 to LKR2.4bn from the LKR4.9bn in FY22-23. The decline in turnover and PAT is attributed to the strategic price adjustments made during the financial year to spur a volume growth of 14 per cent through improved affordability, according to a recently-released annual report.

Cement intake
The cement consumption decreased from 4.54Mt in 2022 to 3.79Mt in 2023, reflecting a contraction of 16.5 per cent in 2023, compared to a 36.4 per cent contraction recorded in 2022. Similarly, sales of locally-manufactured cement declined by 14.7 per cent in 2023 compared to a 29 per cent contraction in 2022. However, for the FY23-24, cement consumption increased by 8.5 per cent compared to the previous financial year. This positive sentiment is reinforced by the Purchasing Managers Index going above 50 for the first time in two years.