Bangladesh's cement manufacturers are facing severe financial strain as regional conflicts disrupt Middle Eastern supply routes, forcing a shift to costlier imports and causing freight charges to double. With over 90 per cent of raw materials imported, producers are struggling with rising input costs and increased insurance premiums, leading to a surge in production expenses.
The conflict has also increased freight costs, further raising overall import expenses. At the same time, weak domestic demand is preventing producers from passing on higher costs to consumers, leaving manufacturers squeezed between rising input costs and a fragile market.
“Bangladesh’s cement sector is under new cost pressure as clinker imports shift away from the Middle East,” said Mohammad Iqbal Chowdhury, chief executive officer of LafargeHolcim Bangladesh PLC. “Earlier, imports were largely sourced from Gulf countries at competitive prices, but that advantage has now disappeared. The country is now increasingly relying on China, Vietnam and Thailand, where clinker is being imported at higher prices,” he added.
Chowdhury said the shift is linked to a widening geopolitical crisis following joint US–Israel strikes on Iran and Iran’s closure of the Strait of Hormuz, a key global trade route. “This has cut shipping traffic, pushed up freight and insurance costs, increased logistics risks and war-risk premiums, and forced rerouting of shipments,” he said. “The impact on Bangladesh’s cement industry has been immediate, as it depends heavily on imported clinker and stone aggregates.”
He added that clinker import costs have risen from about US$42/t to US$43/t to nearly US$53/t due to tighter supply and higher freight charges.
“With demand already weak, companies are struggling to pass on these costs, putting pressure on profit margins and forcing them to cut spending,” he said.
Md Abul Mansur, general manager of Royal Cement Ltd, added, “Sourcing raw materials has become increasingly difficult due to global disruptions. Clinker is no longer coming from the Middle East, while gypsum and limestone from Oman now face sharply higher freight costs,” he said. “Clinker prices have risen from around US$43/t to about US$57/t to US$58/t, while slag prices have increased from US$16/t to around US$23/t to US$24/t driven by war-related disruptions in global shipping.”
Mohammed Amirul Haque, president of the Bangladesh Cement Manufacturers Association and managing director of Premier Cement Mills PLC, said the sector has faced multiple shocks over the past five years, making business difficult. He added that many companies are still operating despite losses in the hope of recovery, but warned that this situation is not sustainable.
