Cement price is likely to go up in the local market due to the rising cost and freight (CFR) of its key raw material clinker.
Sources said the cost and freight of clinker has jumped from $56-57 to $60-62 per tonne in Chattogram port.The shipping charge of clinker has been increasing since November last year and continues to soar, affecting the local market.
In the recent past, shipping of clinker from Indonesia, Vietnam and the Middle East used to cost $20-22 per tonne, which has jumped to $26-28 per tonne.
Bangladesh’s cement industry is largely dependent on imported raw materials, including clinkers.
Bangladesh Cement Manufacturers Association (BCMA) has expressed grave concern over the possible hike in cement price.
Alamgir Kabir, president of BCMA and vice-chairman of Crown Cement Ltd, said price hike is always detrimental for the sector.
Cement price hike results in lowering capacity utilization and hiking the fixed-cost elements, ultimately affecting the net profit or causing loss to the manufacturers, he clarified.He called for cutting additional tax on the cement sector to a level that allows sales of cement without any effect on the manufactures or the market.
National Board of Revenue (NBR) should adjust dual tax and reduce clinker import duty from Tk 500 to 200 per tonne, he said.
If the taxes are cut, the sale of cement will increase and the government will earn more revenue from the sector, he opined.
With 35 companies operating in the sector, the cement industry holds huge potential for Bangladesh. The annual cement production capacity of the country is 8.4 crore tonnes against the demand for 4 crore tonnes. The investment volume in the country’s cement sector is Tk 42,000 crore. This industry also employs several lakh people.
The government earns revenue of more than Tk 5,000 crore from cement industries every year. There are 34 cement manufacturers in the country --- of which five are multinational and the rest are local.