Cement consumption in Bangladesh is expected to grow 13-14 percent this year, riding on the development of roads and bridges and small rural housing projects, the managing director of Holcim Cement Bangladesh said yesterday.
“We are confident and positive about the scope of the cement market,” said Sumanta Pandit.
But growth will largely depend on the political situation, Pandit told The Daily Star in an interview at the company's office in Dhaka. “Sales will grow if the political situation improves in the coming days.”
The Swiss company has already witnessed 'a marginal decline of sales' in its Bangladesh operations due to the nonstop blockade that has disrupted the supply chain, he said.
Like other sectors, the cement industry was also affected in 2013 due to political unrest. “We were looking forward to a great 2015. But unfortunately, the political situation has again taken a negative turn. We only expect that a better situation will prevail.”
In 2014, cement consumption grew 12-13 percent, said Pandit, an Indian national, who took up his current assignment in October 2014.
The installed capacity of cement factories in Bangladesh is 33-35 million tonnes a year, while annual demand is 20-21 million tonnes as of 2014.
“Most plants operate at 50 to 60 percent efficiency, which is why we still have scope for cement growth. In spite of all these issues, companies are still staying afloat.”
More than 35 to 40 companies are operating actively in the market.
Pandit, 49, has nearly 25 years of experience in the cement industry and worked in different cement companies such Ambuja, Lafarge, and UltraTech.
Prior to Holcim, he was the country manager for Emirates Cement, a Bangladesh unit of India-based UltraTech Cement.
Holcim is bullish about the multinational's prospects in the country, thanks to the ongoing high-profile infrastructure projects, which will pave the way for more growth.
“We look at the Bangladesh market with great positivity,” he said, adding that the company recently invested Tk 3,000 million to expand its production capacity to two million tonnes a year.
Holcim is also upbeat on being a premium cement supplier to the ongoing Padma bridge project.
“Considering our global and local expertise and experience in large and infrastructural projects, we are expecting the concerned authorities to allow us to participate in the Padma Bridge project, and the other projects centring it.”
“We are hopeful and enthusiastic about being a part of the growth process of Bangladesh, and we would like to be an important part of any development in this country, for which we are already in talks with consultants. Hopefully, we will be one of the premium suppliers for this project,” he said.
Holcim has contributed to building some of the longest bridges around the world.
In Bangladesh, the Bangabandhu Multipurpose Bridge and Syed Nazrul Islam Bridge (Bhairab bridge) have been built with Holcim cement, he said.
Pandit said Bangladesh will be able to earn a huge sum of foreign currency from cement exports, especially to north-eastern India, if the government provides export incentives and if bilateral cooperation between India and Bangladesh is further improved.
Bangladesh exports 40,000-50,000 tonnes of cement a month to the seven-sister market in India. Indian manufactures are now offering cement at lower rates than Bangladeshi companies due to tax benefits.
Currently, Bangladeshi cement makers cannot compete with Indian manufacturers as there is a price gap of Tk 50-Tk 70 a bag between Indian cement and Bangladeshi cement.
Pandit also called upon the government to arrange low-cost loans for the housing sector in a bid to boost apartment sales. Bangladeshi banks charge 15-16 percent on home loans at present.
The interest rate on housing loans in Bangladesh is still higher than in the Middle East and India. Currently, Indian banks charge 9- 9.25 percent on an average on long-term loans, while it is below 5 percent in the UAE, he said.
Founded in 1912, Holcim has operations in more than 70 countries and is the market leader in cement production in India, Australia, Azerbaijan, Slovakia, Switzerland and Latin America.
Holcim Bangladesh began its journey in September 2000 by acquiring Hyundai Cement Bangladesh. Gradually, Holcim solidified its interest in the country by acquiring two more plants: United Cement Industries at Meghnaghat and Saiham Cement Industries in Mongla. Its Bangladesh operation employs about 600 full-time and temporary employees.
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