Bangladesh's cement industry faces challenges due to its reliance on imports for about 90 per cent of its raw materials, including clinker, limestone, granulated slag, fly ash, and gypsum, which are primarily sourced from the Middle East. The ongoing conflict involving the United States, Israel, and Iran has disrupted supply routes, increasing production costs and affecting manufacturers and consumers.
Domestic demand is weak, leaving producers struggling with rising costs that they cannot pass on to buyers. Production costs have surged by 30 per cent to 40 per cent, while output has dropped by 20 per cent to 25 per cent. A market survey indicated that retail prices rose by BDT40-BDT50 per 50kg sack, with cement priced between BDT470 and BDT550 in city markets.
KM Zahid Uddin, deputy managing director (sales and marketing) at Safwan Bashundhara Global, told the media that the impact has resulted in higher production costs and a decline in output. Additionally, a diesel shortage from the energy crisis has hampered the transport of raw materials and finished goods.
Budget Proposal
The Bangladesh Cement Manufacturers Association (BCMA) has called on the government for tax reforms. Proposals include lowering customs duty on clinker from 15 per cent to BDT500t and reducing advance income tax on key inputs from 2-5 per cent to 0.5 per cent. They also seek the removal of the 10 per cent supplementary duty on limestone, arguing it raises costs and suppresses demand.
Looking ahead, BCMA President Mohammed Amirul Haque expressed concerns about the sector's sustainability. The industry has an installed capacity of 100Mt, with effective capacity exceeding 82Mt, but production in 2025 has not exceeded 40Mt, operating well below the necessary 60 per cent-65 per cent threshold. He emphasised that tax rationalisation could help absorb ongoing shocks, warning that without timely fiscal relief, the sector's growth may falter.
Industry at a glance
Currently, 76 companies are registered in the sector, but only 42 are active, with seven publicly listed. Their combined effective production capacity stands at 58Mt against an estimated demand of 31Mt. Leading brands include Crown Cement, LafargeHolcim, Bashundhara Cement, Shah Cement, and others.
By Abdul Rab Siddiqi, Pakistan
