Cement market heats up

The price of cement in the country continues to climb as raw material prices rise on the international market, putting a damper on output.

In the capital, the retail price of a 50 kg bag of cement has risen roughly 15% in the last week, reaching the highest of Tk 520, driving up construction costs dramatically.

Retailers are criticising manufacturers for failing to provide cement on schedule despite a substantial increase in the price of the product. They also said that a recent price increase resulted in a 20-30% decline in sales.

Manufacturers, on the other hand, said cement prices have risen due to a supply shortage of raw materials, an increase in international market pricing, and a rise in other costs as well.

A visit to various markets in the capital on Monday suggested that the price of cement of various brands jumped by Tk 50-60 per bag.

Per bag of Shah, Supercrete, Premier and Tiger cement was selling at Tk 470-480 instead of Tk 420, Scan cement at Tk 500 instead of Tk 450, Holcim cement at Tk520 instead of Tk 460, Seven Rings cement at Tk 485 instead of Tk 430, Akij cement at Tk 490 instead of Tk 440, and Crown cement at Tk 500 instead of Tk 450.

Nur-e-Alom, the proprietor of Taiyaba Enterprise, said, “We are not receiving products after placing orders and to this, the manufacturers are telling us that they are short on raw materials.”

He added that a recent price increase resulted in a 20-30% decline in sales, apprehending a further decline in the days to come. Meanwhile, LafargeHolcim Bangladesh Ltd (LHBL), a leading cement maker in Bangladesh, reported a record net profit of 64 per cent last year.

According to the company’s most recent data, net sales in 2021 climbed by 27% to Tk 20,534 million, up from Tk 16,222 million in 2020.

In 2021, the profit after tax (PAT) climbed to Tk 3,882 million, up from Tk 2,361 million the previous year.

Contacted, Md Shahidullah, the managing director of Metrocem Cement Ltd, said: “Cement prices have risen due to an increase in the prices of raw materials and cost for transportation in the international market.”

Bangladesh has to import all five raw materials, namely clinker, limestone, slag, fly ash and gypsum, which are used for the production of cement, he added.

“In order to lower retail cement prices, we encourage the government to reduce advance income taxes on all raw materials to 2% from the current 3%,” he further said.

During a pre-budget meeting with the National Board of Revenue (NBR), Shahidullah suggested that the government lower the customs charge per 100 tonnes of clinker from Tk 500 to Tk 200.

According to BCMA’s latest data, the demand for cement rose by 17 per cent to 39 million tonnes in 2021, the highest in the country’s history. Meanwhile, the industry with a market size of Tk35,000 crore currently has twice the production capacity of  78 million tonnes.

Nearly 95 per cent of cement is packaged in bags, with the remaining 5% delivered in bulk. The industry employs around 60,000 people directly and 5 million people indirectly. In 2021, the per capita consumption of cement was 227 kg.