FrieslandCampina Engro Posts 10.1% Revenue Growth to Rs88.4 Billion in 9M 2026

FrieslandCampina Engro Pakistan Limited (FCEPL) has reported a 10.1% increase in revenue for the first nine months of 2026, with sales rising to Rs88.4 billion from Rs80.2 billion in the corresponding period last year.

The company attributed its performance to a favourable product portfolio mix, stronger in-market execution, selective brand investment and improvements in its distribution network.

FCEPL also reported progress in operational efficiency. Initiatives across sourcing and manufacturing helped expand its gross margin by 400 basis points. Operating profit increased by 53.3% compared with the same period last year.

Dairy Sector Faces Tax and Cost Pressures

Despite the revenue growth, the company highlighted continuing challenges for Pakistan’s packaged milk industry. It said the 18% sales tax imposed on ultra-high-temperature (UHT) milk in July 2024 has created an uneven competitive environment for formal dairy businesses.

According to FCEPL, loose milk remains outside the same tax net, widening the price difference between packaged and loose milk. The company said this gap continues to affect demand and volumes in the formal dairy sector.

FCEPL has continued engaging with relevant government stakeholders to advocate for more equitable taxation in line with international benchmarks. It also highlighted the potential impact of the current tax structure on dairy farmers and the wider dairy economy.

Global Conflicts and Inflation Affect Demand

Regional conflicts continued to affect the company’s operating environment during the third quarter of 2026. Higher freight and energy prices added pressure to input costs and the broader supply chain.

Domestic economic conditions also remained challenging. Inflation and interest rates continued to affect household purchasing power, influencing product affordability and consumer demand.

These pressures have created a difficult environment for dairy businesses, which must manage rising costs while keeping products accessible to consumers.

Company Reaffirms Focus on Food Safety

FCEPL said it remains committed to providing safe, affordable and nutritious dairy products to consumers across Pakistan. Drawing on its global expertise and 150-year heritage, the company highlighted its focus on hygiene, food safety and sustainability.

The latest results reflect revenue growth and improved operating performance during the first nine months of 2026, while tax policy, input costs and consumer affordability remain key challenges for the formal dairy sector.