Listed cement firms see a rise in

profits
Sarwar A Chowdhury
Listed cement companies saw an upward trend in their profits in the first half this year,
compared to the same period last year, due to a rise in demand for the key construction
material.
Manufacturers said a rise in the number of residential construction projects in rural and sub-
urban areas fuelled the demand, buoyed by remittance inflows and growing non-farm
economic activities in those areas.
The governments spending on constructing bridges, culverts and public buildings also marked
a rise, they said.
Although the real estate business in urban areas went through volatilities due to low sales of
apartments, their income did not fall much, the cement makers said.
Our economy is rural based, and more than 50 percent of the locally produced cement is used
for construction purposes in rural and sub-urban areas, said Mohammed Amirul Haque,
managing director of Premier Cement.
Cement consumption is also increasing gradually in the private sector for industrial
construction purposes and in the government infrastructure projects, he said.
On the other hand, cement consumption in the real estate sector is only about 10 percent of
the total production, he said.
Of the seven listed cement companies, earnings of five manufacturers went up in the first half,
according to the Dhaka Stock Exchange. The other two are yet to disclose their earnings.
The prospect of the cement industry in a developing country like Bangladesh is bright,
LankaBangla Securities, a stockbroker, said in an analysis.
We have seen the construction sector growth at a compound annual growth rate (CAGR) of
13.55 percent in the last 10 years. Also the sector has grown at a CAGR of 9.73 percent since
2005, it said. The per capita cement consumption in Bangladesh is very low compared to the
world average, the analysis said. The per capita consumption in Bangladesh is only 83kg,
while it is 174kg and 131kg in India and Pakistan respectively.
This indicates that our cement consumption will go up in line with our economic
development, the analysis added.
The total cement production capacity in Bangladesh is around 2.5 crore tonnes a year, while
the demand is around 1.5 crore tonnes, with a surplus of one crore tonnes.
But the actual surplus would be lower as the factories do not run in full capacity.
Masud Khan, finance director of Lafarge Surma Cement, said their net profit increased by 71
percent in the first half compared to the same period in 2012.
This was possible due to control over raw material and production costs, he said.
The results have also been augmented by an insurance claim for business interruption
amounting to Tk 17 crore received in 2013, Khan added.
Last Modified: 320 days ago
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