More capacity for Bangladeshi grinders

More capacity for Bangladeshi grinders
27 December 2010

Local cement firms in Bangladesh are pouring billions of Taka in new plants in an investment bonanza never seen in the sector, eclipsing their giant foreign rivals in a fierce battle for control of one of the fastest growing construction markets.

Led by Shah, the largest local cement manufacturer, the companies are installing new clinker grinding plants worth around 20 billion taka that will double the country’s production capacity to over 30Mt.

They are bolstered by fact that the cement sector has been growing at a record 20 per cent year-on-year since 2009 and near-freezing of investment by five multinational cement giants who operate here, officials said.

Company executives said if the boom continues, Bangladesh is going to be the world’s largest clinker importer by 2015 with demand driven by home builders, individual house owners and infrastructures.
“I’ve never seen such a scale of investment in cement sector in the past one decade,” said Abdus Sattar, a local specialist.

“There is a mad-race going on between the local cement companies. All the big and medium sized firms are bringing in large grinding plants with per-day production capacity ranging between 3000-4000 tonnes,” he said Owned by the country’s top conglomerate, Abul Khair Group, Shah has brought in a 7000 tonne daily capacity plant this year, which would bring its total daily production to 14,000 tonnes by early 2011.

Medium-sized companies like Seven Circle, Fresh, Premier, Crown and Diamond have over the last six months ordered new grinding units to boost production, said a local official. Likewise, smaller firms scattered nationwide like Madina, Metro, Royal, Aramit, Dubai Bangla, Doel, Olympic have also taken the fight to their more illustrious competitors by doubling or even trebling their capacities.

Shah controlled 15 per cent of the country’s 13Mta cement market in 2010 and the new plant would take its installed capacity close to three million tonnes, according to local reports.

Company executives said a 20 per cent annual hike in cement use in the past two years have compelled the factories to scale up production. They also forecast a big jump in demand due to forthcoming investment in infrastructures.

“If the government goes ahead in building elevated expressways, the bridge over the Padma, new bridges over Meghna and fly-overs, there will be a massive spurt in demand,” said Amirul Haq, managing director of Premier Cement.

Premier has bought Chittagong-based National Cement for 800 million Taka and is adding another 4000tpd new plant outside Dhaka to position itself for the upcoming bonanza.

Ramakanta Bhattacharya, a director of Heidelberg Cement Bangladesh, the owner of Scancem, said 75 per cent of the demand is still driven by individual house owners who are investing their savings in new constructions.

“Our estimate is that individual house owners will remain a key driver of growth until 2015 when we expect Bangladesh to be the largest import of clinker in the world,” he said.

Bhattacharya added that his company would add a 750,000 tonnes per annum capacity grinding plant in Chittagong next year in a bid to keep its number two position in the local market.
Published under Cement News