BCMA reports 46% fall in domestic cement sales

The current demand for cement in Bangladesh has declined drastically as construction projects have been halted following COVID-19 lockdown, according to the Bangladesh Cement Manufacturers Association (BCMA).

Cement sales dropped around 46 per cent in April following serious disruption in construction, according to the BCMA. The manufacturers saw a severe fall in sales, despite expecting double-digit growth in 2020 after achieving above seven per cent growth in previous year.

BCMA President, Md Alamgir Kabir, said the sales of cement declined drastically as the novel coronavirus has crippled the BDT300bn (US$3.52bn) industry.

"Our apprehension is that in the upcoming months and indeed the full year, the drop in sales of cement will be significant as the economy will take time to revive," Mr Kabir said.

Confidence Cement Managing Director, Zahir Uddin Ahmed, said, the sales of individual manufacturers have dropped by 50-80 per cent amid the ongoing lockdown.

"People now are busy to meet expenses of daily essentials amid the ongoing crisis. Apart from closing most of the ongoing constructions, many individual home builders have also deferred their construction plans," said Mr Ahmed, who is also BCMA vice president.

According to the BCMA, the annual demand for cement in normal situation is around 33Mt against the installed capacity of around 78Mt. The manufacturers earlier also expected to enhance their capacity by another 11Mt in next three years.

Mr Kabir acknowledged that many local manufacturers installed capacity without proper analysis in respect to feasibility. "The logics which inspired the manufacturers to install capacity significantly also did not work properly due to various reasons including the crash earlier observed in real estate," said Mr Kabir.

He added that the cement manufacturers are also bearing the burden of their unused capacity, nearly 45 per cent, installed for better days.

Although Bangladesh has more than 75 cement manufacturing companies, 35 large and small-scale companies are currently producing cement for local and overseas markets. According to data of BCMA, individual house builders consume 50 per cent of domestic demand, developers/contractors take about 25 per cent and the government controlled projects fill up the remaining 25 per cent.