Bangladesh cement demand is expected to grow by 8-10 per cent in the next five years, according to Masud Khan, CEO of Crown Cement Group.

Last year cement consumption reached 27.1Mt, significantly below the country’s total cement production capacity of 50.2Mta. Domestic cement companies met around 82 per cent of this demand while imports supplied the balance.

Anticipating higher sales due to ongoing and planned megaprojects, Bangladeshi cement manufacturers doubled their capacity in 2013-14. However, growth in demand has lagged the expectations of the industry and the capacity utilisation rate currently stands at around 54 per cent.

“The market is oversaturated and yet the big players are on an expansion spree,” said Mr Khan. Other challenges, according to Khan, include the recent price hike of raw materials, the low retail price, severe port congestion that causes delay in unloading raw materials, the depreciation of the taka against the US dollar, and load limit on the roads and highways.

Logistical challenges to take product to infrastructure projects in remote areas are a particular issue. The contractors of the Rooppur nuclear power plant requiring 1000tpd of cement, but producers are only able to deliver 500-600tpd due to delivery times to the area, reports the Daily Star.

In addition, clinker, slag and gypsum prices have all increased in recent times. The price of clinker has risen by US$10/t to US$54/t in the last year. Slag prices have seen a US$5 advance in the last three months.

Potential solutions could include the lowering of import duties on raw materials and incentivising cement exports. At present Bangladesh only exports modest volumes. In 2015-16 cement to the value of US$1.71m was exported.