Bangladesh cement sales plummet due to political uncertainty
The supply chain of Bangladesh’s cement industry has been significantly impacted due to ongoing political agitation, high cost of raw materials, currency appreciation, roadblocks and lukewarm growth in the construction industry. According to industry sources, cement makers in Bangladesh have reduced production in the face of falling sales due to ongoing political tension, and a slowdown in public and private construction projects.
As a result, cement mills in the country have a combined production capacity of nearly 5Mtpm. However, their active production capacity has dropped to around 1.7Mtpm – raising stakeholders’ eyebrows. Meanwhile, in terms of the annual average, production of the key construction material dropped to 2.5Mtpm in 2023 while it was 3.6Mtpm in the previous year.
“Manufacturers are continuing operations at less than 70 per cent capacity to keep their workers engaged,” said the Head of Business at Akij Cement, Md Moshiur Rahman Dalim. However, in the absence of adequate demand, even reduced production could lead to higher buffer stocks, which is a burden for owners, he told the media. “So, some manufacturers are meeting the slow demand with previous stocks, and it is not clear how long it will take for the situation to improve after the election,” he added. He added production costs increased by about 30 per cent over the past year due to the depreciation of the local currency taka.
Premier Cement Mills Ltd MD Mohammed Amirul Haque echoed the worries and said cement factories have been operating at 30 per cent capacity due to slow sales since November. “We cannot even import raw materials for problems in opening letters of credit (LCs),” he said, citing how cement makers “If “But have been facing one obstacle after another.
“The cement market witnessed negative growth throughout the year. The negative growth was slightly higher in November, and the situation will persist in December,” said
Bangladesh Cement Manufacturers Association President
Md Alamgir Kabir. He said that the government scaled down large-scale infrastructure development works in the country by almost 65 per cent this year compared to 2022 and 2021.
Published under
Cement News
