MI Cement, one of the listed cement manufacturers in country has been facing continuous operational losses due to its expansion business to other sectors and coronavirus pandemic.
The company recorded Tk 236.89 million losses in the nine months period until March 2020 and expected further deterioration till June, Industry sources said.
During the last couple of years the company invested around Tk 100 crore from from MI Cement earning to sectors like shipping, power generation, transportation and concrete building materials.
“Crown Cement established associated industrial units such as Crown Polymers Bagging Ltd., Crown Power Generation Ltd., Crown Mariners Ltd., Crown Maritime & Shipping Services Ltd., Crown Transportation & Logistics Ltd. and Crown Cement Concrete & Building Materials Ltd which now puts burden on its own operation,” a spoke person of the company said.
Following the downfall MI Cement management has decided to suspend its previous decision of establishment of a new factory plant due to slow demand of cement across the country over coronavirus pandemic.
“Demand for cement across the country has plummeted due to Covid-19. At present, more than half of the capacity of the cement sector is unused. It will take two to three years for the demand for cement to return to normal. In this situation, the board of MI Cement Factory Limited has decided to suspend the work of setting up the sixth unit,” the company spokesperson said.
The company informed investors through the stock exchange recently that technical and commercial talks with the international contractor have been suspended due to Cavid-19. Besides, the issue of financing of the project is also pending. Moreover, the demand for cement has also decreased due to Covid 19. The current demand can be met with existing capacity. For this reason, the board of the company has decided to postpone the establishment of the sixth unit for the time being and consider it later.
In January last year, MI Cement announced to set up a sixth unit at the existing factory premises at Munshiganj’s West Muktarpur with an investment of Tk 600 crore. The daily production capacity of this unit is 6,400 tons. The unit was scheduled to start production in January next year.
Meanwhile, the latest board meeting, the decision to separate the three mother vessels owned by MI Cement Factory Limited from the direct management of the company under three separate subsidiary companies has been canceled. To take Mother Vessels under the subsidiary company would require the approval of various foreign authorities. Due to Covid -19, all kinds of international authorities are closed. Due to this, the company could not complete the formalities.
Earlier, in November last year, MI Cement decided to transfer Tk 56.85 crore to Ocean Voyager Shipping Lines Limited, Tk 86.46 crore to Ocean Victory Shipping Lines Limited and Tk 70.61 crore to Ocean Vision Shipping Lines Limited. The reason given by the company at that time was that the main business of MI Cement was to produce and sell cement in the country’s market.