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Bangladesh can have more basic cement industries |
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September 6, 2000
Dhaka (UNB)- Bangladesh can have more import-substitute basic cement industries as domestic requirements are still met mostly with imports, either in bagged or clinker forms. The observations were made by the executives of a joint-venture cement project, allaying apprehensions about over-saturation of the market in case new plants are set up. State-owned Chhatak Cement Factory is the lone basic cement industry in the country producing merely 200,000 tons while country's cement consumption stands at roughly 5 million tons. The US$ 240 million Lafarge Surma Cement Project will be the first integrated cement industry in the private sector when it goes into commercial production in 2003 initially producing 1.2 million tons per year. So there remains enough scope for setting up even more import-substitute basic cement factories, an executive of the project said. Existing 17 cement factories, who just import cement clinkers, crush those and mix with gypsum, produce around 2.4 million tons of cement. Annual import of bagged cement figures around 2.4 million tons. In fact all these factories are grinders with a marginal value addition as they import cement slabs which are the last stage of cement-production process. Small grinding units often face problem in importing clinkers of uniform standard and that is why they are blamed to compromise the quality, industrial sources said. Government's certain tariff protection resulted in mushrooming of clinker-crushing units and many of them little care about quality in absence of strong regulatory instruments. Bangladesh Cement Manufacturers Association recently advised the government not to allow more cement factories as they claimed local production would reach up to 7.3 million tons by 2002 against the demand of 5.5 million by then. Another 39 factories are in the pipeline with a production capacity of 8.7 million tons, they said, expressing their worry about the future of the industry if the market becomes over-saturated. But Lafarge Surma Cement Project management is not worried about the marketing of its product as it calculates an annual 9-10 per cent growth in cement consumption. Against a forecast of cement market glut by 2002, French cement major Lafarge is confident of enjoying a lead when it enters the fray by 2003. "It's true that there are many small projects coming up," said Lafarge Surma Cement managing director Michel Folliet when he was asked to comment on the market. "But we won't face the crunch as we believe market will always be there for quality cement." However, echoing the concern of local cement manufacturers, he said so many projects should not be implemented considering the quality of products. Lafarge Surma Cement Project, a joint venture of the world's second-largest cement producer Lafarge of France and Islam Group of Bangladesh, will be the first private-sector integrated cement plant at Chhatak in Sunamganj. It will import basic raw material-limestone and shale-from its own quarry in Indian State of Meghalaya, bordering Sunamganj. |