With a continuous decline in sales, cement companies are now able to utilise hardly 50 per cent of their production capacities as the country's present demand is 65 lakh tonnes against the total capacity of more than 135 lakh tonnes.

"Local cement plants are now in deep trouble and some of them are on the verge of collapse as they are heavily dependent on imported clinker," said an official of Bangladesh Cement Manufacturers Association (BCMA).

However, the multinational cement companies are in an advantageous position as they have their own sources of main raw material -- clinker. Besides, they can manage loans from banks abroad at three to four per cent while local companies have to borrow money from local banks at around 15 per cent interest rate, he said.

Confidence Cement Ltd, one of the leading local companies, could utilise around 50 per cent of its total capacity during July-December period of last year and incurred a net loss of Tk 2.37 crore, company officials said.

Aramit Cement Ltd having an annual capacity of producing 2.10 lakh tonnes could utilise 51.86 per cent of its capacity and incurred a loss of Tk 4.53 crore in 2002. Its loss in the first six months of 2003 has been estimated at Tk 3.04 crore.

With an annual capacity of five lakh tonnes Mongla Cement Ltd utilised less than 50 per cent of its capacity in July-August of this year. "We had a net loss of Tk 3 crore in 2002-03 fiscal year," said an official of the company.

Niloy Cement Industries Ltd could utilise 51 per cent of its installed capacity and had to incur a loss of over Tk 2.50 crore in the last financial year.

The capacity utilisation and sales of the multinational cement companies also saw dips substantially but they managed to make little profit.

HeidelbergCement Bangladesh's net profit dipped to Tk 4.65 crore in 2002 from Tk 20.9 crore in 2001 and sales to Tk 134 crore from Tk 141 crore.

In a bid to cope with the adverse situation, some companies have taken various cost-cutting measures, including prudent consumption of electricity. Some companies are considering job cut also, industry insiders said.

"We have reduced power cost through prudent use of low tariff hours and installation of capacitor banks," said an executive of HeidelbergCement Bangladesh Ltd.

In 2001, cement industry witnessed a sharp growth as the number of plants increased to 50 from only 20 in the previous year. The number of plants went up to 61 in 2002 with a total capacity of 135.57 lakh tonnes.

According to BCMA, 63 local and multinational companies have been given the association's membership. On the other hand, a recent survey of the Board of Investment (BoI) revealed 46 companies are currently in operation.

The annual demand for cement is growing at the rate of eight per cent owing to growth in housing and construction industry in Bangladesh. This high demand attracted world's six leading cement manufacturers-- Lafarge, Holcim, Heidelberg, Taiheiyo, Cemex and Scancem to start their operations in the country.

The current price of a 50-kg bag cement ranges between Tk 200 and Tk 215 at the retail level depending on brand.