Tokyo Cement PLC, Sri Lanka’s largest cement manufacturer, grew Group revenue 22% to Rs61 billion in the financial year of 2026. Cement sales volumes rose 28% to 1.82 million metric tons, vis-à-vis the wider industry’s 19% growth, lifting the Group’s share of the domestic market to 32%. The Board raised the dividend to Rs2.50 per share. Tokyo Cement held pricing steady through the year, absorbing higher input costs rather than passing them to customers, even as Cyclone Ditwah disrupted the industry in November 2025.
Group capital expenditure rose 55% to Rs4.8 billion, funding a 1-million-tonne grinding plant in Trincomalee, and a dedicated coastal cargo vessel that has already cut logistics costs across the Western and Southern provinces. Gnanam says the Group began its most recent expansion phase in 2020, arguing that in a capital-intensive industry with long project lead times, capacity has to be built ahead of demand. Sri Lanka’s cement industry, Tokyo Cement included, can now produce 10.7 million metric tons a year against national demand of 5.62 million. Local manufacturers now supply 86% of national cement demand, up from 62.8% in 2020.
Praveen Gnanam, Executive Director at Tokyo Cement, oversees the Group’s Innovations business unit, marketing, investor relations and the overall strategic direction for sustainability and digital transformation.
The Group’s portfolio includes a 24 MW renewable energy network that has made its manufacturing operations in Trincomalee 100% energy independent.
Tokyo Cement’s service offering is enhanced through its research laboratory, which develops and certifies new construction materials, and an industry skill-building programme that upskilled more than 4,000 construction professionals across the island during the FY2025/2026.
He sees investment in each of these areas as moves to enrich the sector’s resilience. Each initiative, Gnanam argues, exists to strengthen the Group’s position in a market it is helping to shape, whether that means building the local value chain or empowering the pool of skilled labour the whole industry depends on.
Tokyo Cement has spent four decades as Sri Lanka’s largest cement manufacturer, and the Group also runs a renewable energy business and a research below its 2021 peak, yet Tokyo Cement has spent this period expanding capacity and entering new product categories. What do you see that made this the right time to invest rather than taking a step back?
In a capital-intensive industry with long project lead times, capacity has to be built ahead of demand. Our major capacity enhancement investments commenced in 2020. At the time, Sri Lanka’s cement consumption was 6.13 Mn MT, with local manufacturers supplying only 62.8% of national demand, and the industry forecasts pointed to sustained growth in cement consumption.
However, the economic crisis interrupted the growth trajectory anticipated by the industry. The market, which crashed down to 3.8 Mn MT, started a gradual recovery, and the demand moderated at 5.62 Mn MT in FY2025/26, of which the local industry was able to cater to 86% of national consumption.
Meanwhile, total installed capacity across local manufacturers has expanded to 10.7 Mn MT by 2025, demonstrating that Sri Lanka now has sufficient domestic capacity to support future growth.
However, with demand expected to recover year-on-year, the current capacity base places the local industry in a strong position to capture a larger share of domestic demand, conserve foreign exchange, and support the country’s long-term economic resilience.
Tokyo Cement completed a 1-million-metric-ton grinding facility in Trincomalee, moving from traditional grinding to a modern blending process, and the project was executed by in-house engineers. How did you build that technical capability, and what does it mean for growth?
One of our greatest strengths is the capability of our in-house engineering and technical teams. They have been empowered to solve complex operational challenges, improve production efficiency, and develop innovative engineering solutions suited to our operating environment.
Their expertise has strengthened both our manufacturing base and innovation pipeline, enabling us to lead product development through in-house R&D and introduce several first-to-market solutions across new categories.
Many of these innovations have helped transform conventional construction practices by improving efficiency, optimising the use of scarce resources, and meeting the evolving expectations of modern builders for higher quality and performance. This reflects our mission to continuously raise industry standards, not only through the products we offer, but also through the way they are applied to create greater value for customers and the construction sector as a whole.
Tokyo Cement ran 67 island-wide skills seminars in 2025, upskilling over 4,000 construction professionals it doesn’t employ. Did the Group build this programme in response to a skills shortage, and does migration make that investment harder to sustain?
Addressing the construction sector’s skills gap has been a long-standing priority for us. More than 15 years ago, Tokyo Cement pioneered industry-focused skills development through the A. Y. S. Gnanam Construction Training Academy in Dambulla, to provide NVQ-certified vocational training for masons. We later expanded this initiative through island-wide training programmes for masons, contractors, technical officers, engineers, and other construction professionals.
The need has become more urgent as labour shortages, migration, and rising project demand intensify pressure on the industry. With upcoming projects estimated to require over one million construction workers, and the local workforce able to meet less than half that requirement, the shortage has contributed to higher costs, inconsistent workmanship, and subcontracting structures that dilute value.
Improving skills across the construction ecosystem is essential to raising productivity, quality, and professionalism. By investing beyond our own workforce, we help strengthen the industry and support its next phase of growth.
Tokyo Cement’s interest cover has risen from 3.16 times to 5.56 times, even as the Group carried significant new capital expenditure for the Trincomalee expansion. How do you protect long-term investments when the market is pushing you to compete on price?
It is important to clarify that the Group’s interest cover declined from 5.56x in FY2025 to 3.38x in FY2026, while the Company’s interest cover reduced from 2.78x to 2.61x. This was mainly due to higher finance costs associated with strategic investments, including the Trincomalee capacity expansion and the acquisition of a dedicated vessel for coastal transportation.
These investments were made to strengthen long-term competitiveness. The vessel has improved distribution efficiency and cost competitiveness, particularly across the Western Province and southern regions, by shifting freight from road to sea. This reduces exposure to fuel price volatility and supply disruptions, while lowering logistics costs for dealers and distributors.
While these investments have increased short-term finance costs, they support higher capacity utilisation, better fixed-cost absorption, wider market reach, and stronger operational resilience. In a highly competitive market, protecting long-term investments requires balancing pricing discipline with volume growth, customer affordability, and sustainable margins.
Tokyo Cement’s Trincomalee manufacturing operations run entirely on self-generated renewable power. Is that model something the Group can extend further?
Tokyo Cement is the pioneer of biomass power generation in Sri Lanka and the largest operator in the sector, with a total installed renewable energy capacity of 24 MW. This long-term investment has enabled our cement manufacturing operations in Trincomalee to become 100% energy independent, while significantly reducing the carbon footprint of production.
However, the model cannot be replicated uniformly across the Group. We operate the country’s largest network of ready-mix concrete plants, which are geographically dispersed and continue to rely on grid energy, as biomass requires significant infrastructure and solar is not always viable due to space and return considerations.
The 6 MW of dendro biomass energy and 920 kW of rooftop solar power we export to the national grid more than offset the electricity consumed by our ready-mix concrete plants and further support Sri Lanka’s renewable energy transition.
The Construction Research Centre in Colombo has established a Non-Destructive Testing laboratory with equipment reportedly not available elsewhere in Sri Lanka. How is the Group thinking about research, and what problems need to be solved today that didn’t exist previously?
The Construction Research Centre is central to Tokyo Cement’s innovation and quality leadership. Beyond serving as our R&D hub, the Centre functions as both an independent quality assurance laboratory and an industry-facing technical resource. It validates factory test results to ensure that cement, concrete, and value-added products meet required standards before reaching the market, while also providing independent testing and technical consultancy services to contractors and developers.
The CRC has pioneered category-leading innovations, including high-performance tile adhesives, repair grouts, multipurpose mortars, advanced waterproofing systems, and sustainable concrete solutions.
Its Non-Destructive Testing (NDT) laboratory extends its service offering beyond product development, enabling structural assessments of buildings in service and under construction. This helps contractors, developers, and asset owners diagnose strength, durability, reinforcement corrosion, and long-term performance issues without damaging the structure. This is increasingly important as Sri Lanka’s building stock ages and developers seek greater assurance on safety, functionality, and lifecycle performance.
The R&D team substituted imported raw materials with locally sourced alternative cementitious material, reducing costs and import dependency at the same time. Does Sri Lanka have enough of these materials at scale, and what happens if local supply tightens?
Sri Lanka has some deposits of materials that can substitute a meaningful portion of imported cementitious materials used in cement blending. This presents an important opportunity to strengthen industry resilience, reduce foreign exchange outflows, and support the national economy.
However, scaling this opportunity will require a more streamlined and predictable approval framework for mining, quarrying, and processing. Lengthy approval processes and shifting policy positions remain major bottlenecks, increasing investment risk without greater regulatory clarity and long-term policy assurance.
To support this transition, we have proposed revisions to the Sri Lanka Standards Institution to upgrade local standards for blended cement formulations by increasing the permissible clinker substitution ratio from 35% to 50%. This would bring local standards closer to international benchmarks adopted in Europe, Singapore, and India, without compromising product quality or performance. It would also reduce import dependence, lower production costs, strengthen supply chain resilience, and retain more foreign exchange within the national economy.
TOKYO SUPERMIX’s Pervious Concrete won Silver at the CIOB Annual Green Awards. TOKYO SUPERSET Multi-Purpose Mortar took Gold in the Sustainable Products category at the World Construction Symposium. When you are selling a product category that contractors have never used before, how do you change behaviour on a construction site?
Changing behaviour on a construction site requires education, demonstration, and trust. We have invested consistently in professional education across the construction value chain, engaging engineers, contractors, masons, technical officers, development officers, and other stakeholders through workshops and training programmes.
Our technical teams also conduct on-site product demonstrations to promote best practices and modern application techniques. While international developers are often familiar with advanced construction methods, wider local adoption requires sustained engagement.
By raising awareness of cost-efficient solutions that improve productivity, quality, and resource efficiency, we help bridge the knowledge gap and support higher industry standards.
Looking ahead to the next decade, how do you see Tokyo Cement evolving? What opportunities or challenges do you believe will define the future of the construction industry in Sri Lanka, and where does the Group hope to lead that change?
Over the next decade, Tokyo Cement will continue evolving from a cement and concrete manufacturer into a broader construction solutions partner. This means deepening value addition around cement, strengthening local sourcing pipelines, investing in materials development, and creating products that reduce both the cost and carbon footprint of construction while improving productivity on site.
Sri Lanka’s construction industry continues to grapple with high construction costs, labour inefficiencies, skills shortages, foreign exchange constraints, and increasing pressure to build more sustainably. Addressing these challenges and transforming the industry into one that is resilient, future-ready, and growth-oriented requires more than simply supplying materials It requires complete solutions that improve workmanship, reduce wastage, shorten project timelines, and make modern construction practices easier to adopt.
Tokyo Cement hopes to lead that change by combining manufacturing scale, research capability, renewable energy, technical education, and product innovation. Our ambition is to help Sri Lanka build faster, better, and more responsibly, while strengthening the local industrial base that will support the country’s next phase of development.
“The 6 MW of dendrobiomass energy and 920 kW of rooftop solar power we export to the national grid more than offset the electricity consumed by our ready-mix concrete plants and further support Sri Lanka’s renewable energy transition.”
Building for the Future
Tokyo Cement’s growth anchors on decisions made ahead of time: building competencies before the market demands it. Gnanam’s account is that the Group is now seeing the payoff from decisions it made years ago. Sri Lanka’s construction sector is recovering, and Tokyo Cement enters that recovery already holding the largest installed capacity, the most self-sufficient energy base, and the widest reach into the workforce that will build the next decade of the country’s infrastructure. The groundwork laid since its inception in 1982, when the Group began its mission to transform the construction landscape of the country, is now converting into the volume and market share gains showing up in its balance sheets.
Gnanam frames the company’s task less as an act of manufacturing and more as an act of nation-building: training professionals, substituting imports, and pushing local standards closer to international benchmarks. Sri Lanka’s construction industry, he argues, needs more than material supplied to it. It needs a partner willing to invest in the future, from testing labs to stakeholder empowerment to green initiatives that are built into the company’s core business model. Tokyo Cement’s next decade starts from a position few of its competitors can match.