Bangladesh: supply glut or next Asian cement hub?

The high demand for quality cement in Asian markets has lured Bangladesh companies into expanding production capacity at their local factories or installing new plants. As a result the installed capacity of the local manufacturers far outstrips domestic demand, making the country self reliant in cement supply. 

"Bangladesh could be Asian hub of cement thanks to better quality and diversification of products as well as competitive price range," Mohammad Amirul Haque, managing director of Premier Cement Ltd, told the Financial Express.

The local cement manufacturers have the capacity to produce 500m bags annually, but the domestic market demand is 320m bags, he said. Therefore, there is huge potential for exporting cement to the world market, but government support is crucial, he noted.

In view of the situation, Alamgir Kabir, additional managing director of Crown Cement company, visited Sri Lanka, Myanmar and some southern African countries recently on a market exploration mission. Bangladeshi cement producers are keen to export to these destinations as these countries have many development projects  in the pipeline. Moreover, Bangladesh cement already enjoys a good reputation and is well established in these countries. 

Previously, Bangladesh was dependent on cement import from several countries, including Indonesia, China, Japan and Korea. The imports would land the country with a hefty foreign currency-denominated import bill.  According to Bangladesh Cement Manufacturers Association there are more than 125 cement grinding plants in the country. They can satisfy the local demand and cater overseas markets.