Cement industry owners apprehend that the sector in total has conceded a total of Tk 3,000 crore financial losses during last four months coronavirus pandemic. They also feared that the financial losses would be surpassed Tk 10,000 crore if the situation remain unchanged until December.
The entrepreneurs wrote a letter to the Financial Institutions Division (FID), where they said that it would take at least one and a half to two years for the industry, which is 100 per cent import-dependent, to return to normalcy as its global supply chain collapsed.
The industry has lot of competition as there is double the production capacity than the demand. The cement sector in Corona has been pushed into a more difficult situation. To boost the economy, it is needed to stimulate the construction sector, the letter wrote. “Cement is one of the main materials for development activities. This sector is associated with urbanization, rural economy, and the revitalization of the construction sector. Therefore, we hope the proposals of the entrepreneurs will be taken into consideration to overcome the crisis situation in the sector.” The letter further wrote
In the letter the FID the entrepreneurs have sought the opportunity to repay all types of term loans / lease loans for the cement industry on a monthly basis in the usual manner for next 12 years. In addition, they requested a grace period for all types of term loans / lease loans till December this year.
The entrepreneurs also sought assurances that banks would not increase loan renewal fees, LC commissions and confirmation charges after fixing 9 per cent interest on bank loans.
At present there are 34 domestic and foreign cement companies in production in the country. Of these, 29 are local entrepreneurs. The annual demand of cement in the country is about three and a half crore tons. Although the production capacity is more than double that is about seven and a half crore tons. About Tk 50 thousand crore has been invested in this sector. The self-sufficient sector is also exporting some parts to India. About two lakh people are being directly and covertly employed in this sector in 34 factories.
At this time, the cement manufacturers have produced 3 crore 36 lakh tons of cement. Among them Premier, Crown, Confidence Cement, Metrosem, King brand, Bashundhara, Shah, Diamond, Fresh, Akij, Anwar, Mir Cement etc. are notable brands. The government has declared a general holiday from March 26 to prevent corona infection in the country. At that time, almost all the business establishments across the country were closed except for some emergency related products and services. As a result, April, May, and June are difficult times for business.