Cement makers lament over unmet demands

Cement manufacturers are frustrated over their demands being left unaddressed in the proposed budget, from which they had hoped to avail some assistance to cope with losses incurred for the pandemic.

A 60 per cent cut in import duty on clinker and waiver of interest on existing loans were sought by the Bangladesh Cement Manufacturers' Association (BCMA).

"We import clinker at $42 per tonne but when we go to pay duty, customs always takes the cost price to be $50 per tonne -- it is so unfair," said Md Alamgir Kabir, president of the BCMA.

Subsequently, the association called for the import duty on clinker, the sector's major raw material, to be brought down to at least Tk 300 a tonne from the existing Tk 500.

Cement manufacturers are passing through hardship as they had zero sales during the countrywide closure in the last two-and-a-half months.

Kabir spoke of the manufacturers having deposited about Tk 750 crore as adjustable advance income tax in the past seven years.

"We are not getting back the refundable money from the National Board of Revenue despite applying frequently," he added.

If the government wants the economy to recover, it should give some facilities to save businesses and they would help the government lift up the economy for the next stage, said Mohammed Amirul Haque, managing director of Premier Cement.

The situation is quite different than in any other year, so the government should take the demands of cement manufacturers into consideration so that they can continue to exist, he said.

"We do not want this type of facility over the years. But we need cooperation from the government during exceptional times for survival."

Clinker accounted for $900 million of the $1.35 billion worth raw materials that the manufacturers imported last fiscal year.

Due to a lack of mineral resources, local cement manufacturers bring in about 18 million tonnes of clinker every year, according to Haque.

The sector did not get any benefit from the budget counting a loss of about Tk 600 crore from March 26 to May 30, said Md Shahidullah, first vice-president of the BCMA.

He further said factories opened on a limited scale on June 1 as the demand had been close to zero.

With no revenue being generated, questions remain on how the manufacturers would be able to import raw materials and pay additional custom duty, he said.

"If the government does not save businesses, how will it generate taxes and revenue? We hope the government will consider our demands when it passes the final budget in parliament," he said.

The association has forwarded the demands through the Federation of Bangladesh Chambers of Commerce and Industries for inclusion in the final budget.

Annually $3 billion or Tk 25,500 crore worth of cement is sold, of which 45 per cent goes to government projects, 30 per cent to real estate companies and the rest to individual consumers, Shahidullah said.

"Cement supply has begun but the sales are nominal at this moment."

Considering the poor economic climate, cement manufacturers would be willing to sell their products at the manufacturing cost, he added.

Cement manufacturers import clinker, gypsum, fly ash and iron slag from China, Hong Kong, India, Indonesia, Thailand, Japan, Korea, Malaysia, Oman and the UAE.

There are about 125 cement manufacturing companies in Bangladesh, out of which 37 are in operation and they have an investment of about Tk 30,000 crore.

The total production capacity of the cement mills was 58 million tonnes in 2018.