The price of the cement is going to be hiked in the local market in the face of raw material import adversities.
The problems relating to shipping of the clinkers and other raw materials are responsible for the price hike, source said.Cost and freight of clinker at Chattogram port has jumped from $56-57 to $60-62 per ton.
Increase in ship fare taking place in November last year has not subsided yet. Longstanding high fare has affected the cement market.
In the recent past, shipping of clinker from Indonesia, Vietnam and Middle East used to cost $20-22 per ton—which is now $26-28.
It may be mentioned that the cement industries in Bangladesh are largely dependent on the imported raw materials, including clinkers.
Bangladesh Cement Manufacturers Association (BCMA) has expressed deep concern over the possible hike in cement price.
Alamgir Kabir, president of BCMA and vice-chairman of Crown Cement Ltd, said price hike is always detrimental for the sector.Cement price hike results in reducing capacity utilisation and hiking fixed cost, ultimately affecting the net profit or causing loss to the entrepreneurs.
He called for cutting additional tax on cement sector to a level which allows sale of the product to be unaffected.
National Board of Revenue (NBR) should adjust dual tax and reduce clinker import duty from Tk 500 to 200 per ton, he said.
If the taxes are cut, sale of cement will increase and the government will earn more revenue from the sector, he opined.
Cement sector is potential in the context of Bangladesh with 35 companies operational right now.
Annual cement production capacity of the country is 8.4 crore metric tons as against demand 4 crore metric tons.
Total investment volume is Tk 42,000 crore creating employment of several lakhs people.
The government gets revenue exceeding Tk 5,000 crore from cement industries every year.
Bangladesh has been exporting cement for 15 years.
Per head cement consumption is 1,700kg in China, 890kg in Malaysia, 620kg in Thailand, 518kg in Vietnam, 412kg in Sri Lanka, 305kg in India and 210kg in Bangladesh.