Import of cement raw materials rises
Import of raw materials used in manufacturing cement has increased in recent months in spite of the items turning pricier.
In turn, manufacturers have raised the price per bag of the binder, reasoning it was for the hike in the exchange rate of the US dollar against the taka.
Some of 5.12 million tonnes of clinker, granulated slag, limestone, gypsum and fly ash were imported in July and August of the current fiscal year.
Worth Tk 2,303.84 crore, this is 34 per cent more than what was brought in the same period of the previous fiscal year.
Clinker, the main raw material, cost $62.14 per tonne on an average in August. The price has effectively gone up 17.5 per cent year-on-year.
The price of 50-kilogramme bags of every brand has been raised by Tk 50 to Tk 70 in the span of a month to currently sell for Tk 470 to Tk 510.
The exchange rate hit Tk 95 per US dollar on the interbank platform in early August. Over the past one year, the currency of Bangladesh depreciation by 12.02 per cent.
Some of 5.12 million tonnes of clinker, granulated slag, limestone, gypsum and fly ash were imported in July and August of the current fiscal year -- a 34 per cent rise year-on-year
"The whole world is going through instability after Covid-19. We are no exception…Our costs have gone up by 20 per cent to 22 per cent due to the rise in the dollar rate," Hakim Ali, director of Diamond Cement, told The Daily Star.
In addition, products purchased earlier are now requiring payments at the current US dollar rate. As a result, it will be difficult to overcome these losses and sustain production, he said.
"We have been forced to increase the price of cement for the hike of the dollar price although the price of raw materials in international markets has been stable over the past month," said Golam Kibria, general manager of Premier Cement.
He claimed that all the manufacturers were facing losses of huge amounts for this.
"Earlier, we opened an LC (letter of credit) at a dollar rate of Tk 87 but recently paid Tk 112 per dollar and faced huge losses," he said.
According to Bangladesh Cement Manufacturers Association, there are 37 active cement factories in Bangladesh and more than Tk 30,000 crore has been invested in the industry.
Manufacturers have a combined annual production capacity of 58 million tonnes against a local demand of 33 million tonnes.
According to Chattogram customs, some 30 million tonnes to 35 million tonnes of raw materials are annually imported, mostly from Thailand, Vietnam and China, through the Chattogram and Mongla ports.
The import volume has gradually increased, doubling in the past five years.
Around 36.1 million tonnes of raw materials were imported last fiscal year.
In fiscal year 2017-18, it was about 16.8 million tonnes.