Cement sector struggles amid overcapacity
Staff Reporter:
Bangladesh’s cement industry is facing one of its toughest periods in recent history, as excess production capacity, shrinking demand, and rising financial costs squeeze manufacturers across the board.
Industry leaders report that most plants are operating at less than 30percent of their capacity, far below the global standard of 70-80 percent, leading to oversupply, declining prices, and mounting financial stress.
Over the past decade, optimism surrounding megaprojects, a booming housing market, and plans for 100 economic zones prompted investors to pour more than Tk 45,000 crore into expanding production.
Now, total cement capacity in the country has reached around 10 crore tonnes per year, roughly four times higher than a decade ago. Yet domestic consumption has failed to keep pace.
In 2024, Bangladesh used only 3.8 crore tonnes, less than 40percent of the total capacity. This year, consumption has fallen even further, forcing companies to cut production and lay off workers.
Amirul Haque, president of the Bangladesh Cement Manufacturers Association (BCMA), said, “After Covid-19, we began recovering in 2021, driven by renewed construction. But since 2023, conditions have worsened drastically”.
Many entrepreneurs expanded based on government projects. When those projects slowed, we faced severe cash flow issues, and several small plants have already closed, he added.
Leading producers are feeling the strain. Bashundhara Cement, with an annual capacity of 7.3 million tonnes, is running at only 20percent utilisation.
Deputy Managing Director KM Zahid Uddin said, “We’ve cut manpower and slashed prices, yet losses continue.” Similarly, Mir Cement, which expanded to 18 lakh tonnes in 2023, now operates at just a quarter of its capacity.
A senior official explained, “Sales have fallen sharply, and we’re struggling to pay wages. If conditions don’t improve, production could stop entirely.” Several smaller producers, including Bengal Cement, Aramit Cement, and Mostafa Hakim Cement, have already suspended operations.
Among top producers, Shah Cement, part of the Abul Khair Group, maintains over 50percent utilisation, better than most, but still faces demand and price pressures.
Premier Cement is operating at around 40percent capacity, while Crown Cement has seen 60percent of its production idle due to weak economic activity.
Meghna Group, however, recorded 6percent growth, with capacity utilisation at 65percent, though executive director Khorshed Alam noted that smaller companies continue to struggle with falling demand and an oversupplied market.
BCMA executive committee member Md Shahidullah said, “Around 70percent of the sector’s Tk 45,000 crore investments is financed by bank loans. Revenues are falling, but interest payments keep climbing, creating unbearable pressure for many companies.”
The industry employs 7-8 lakh workers directly and another 2 lakh indirectly, putting thousands of jobs at risk as plants scale down or close.
Leaders have urged the government to restart stalled projects, ease import procedures, and provide financial relief.
Haque added, “Bangladesh’s long-term need for housing and infrastructure remains strong. But until demand revives and financial pressures ease, the cement sector will face one of its hardest challenges yet.”
