According to HeidelbergCement Bangladesh Ltd’s (HB) 2023 annual report, the company successfully manufactured and distributed a combined total of 2.185Mt of cement through its three strategically-positioned plants in Kanchpur, Chittagong, and Mukterpur. This quantity represents a marginal 1.2 per cent decline compared to the aggregate sales volume achieved in 2022. Notably, the company’s overall sales volume decreased by 28,000t compared to the preceding year.
HB reported a net profit of BDT459m (US$0.417m), compared to a loss of BDT233m in the same fiscal year last year. The net profit can be attributed to higher sales of BDT17.95bn compared to BDT16.7bn in the same period last year.
Cement market sees significant growth
The Board of Directors reported comments about Bangladesh’s cement industry, saying that the cement market in Bangladesh has experienced significant growth over the past decade, with demand fuelled by the country’s rapid urbanisation and infrastructure development. The industry is dominated by a few major players, with local producers accounting for most cement production. Bangladesh’s cement market is one of the world’s fastest-growing, with per capita cement usage of around 230kg in 2023.
Residential, engineering and non-engineering consumption are the key drivers of this market. Increasing urbanisation coupled with large-scale infrastructure development projects implemented by the government has stimulated the building materials sector and increased demand for cement, with a compound annual growth rate (CAGR) of 8.2 percent in the last ten years.
In 2023 the industry adjusted for the incremental cost with sales prices, resulting in margin growth, although there was a reduction in volume. Price hikes for other building materials, such as steel and bricks, were even higher. This, along with significant inflation, depletion of foreign currency reserves, and the devaluation of the taka against the US dollar, contributed to weaker demand for cement in 2023. Additionally, the ongoing price war among manufacturers to gain market share has intensified. Economic volatility is presumed to persist through 2024.
