Displaying items by tag: LafargeHolcim Bangladesh
LafargeHolcim Bangladesh and PRAN-RFL Group partner for sustainable waste management
16 September 2024Bangladesh: LafargeHolcim Bangladesh Limited (LHBL) has entered into a memorandum of understanding with conglomerate PRAN-RFL Group. The agreement focuses on the sustainable disposal of non-biodegradable and non-recyclable materials from PRAN-RFL's food products at LafargeHolcim's Chhatak cement plant in Sunamganj.
Corporate finance director Uzma Chowdhury noted its operation of three recycling plants capable of processing 40,000t/yr of discarded materials. He said "Some materials cannot be recycled. These often mix with soil and water, causing significant environmental harm. This is why we are partnering with LafargeHolcim to ensure that non-recyclable materials are managed in an effective and environmentally friendly manner. Now, non-biodegradable and non-recyclable food products produced by Pran-RFL Group will be managed in a sustainable manner at the LafargeHolcim plant."
CEO of LafargeHolcim Bangladesh Mohammad Iqbal Chowdhury said "LafargeHolcim has been working for a zero waste future though its Geocycle wing. Our Chhatak plant is the only integrated cement plant in Bangladesh that produces clinker. This enables us to manage different kinds of ‘waste’ sustainably."
Update on Bangladesh, June 2023
14 June 2023Cement producers in Bangladesh received a surprise at the start of June 2023 when the government budget proposed increasing the duty on imported clinker. The Bangladesh Cement Manufacturers Association (BCMA) reacted this week by calling for the duty on clinker to be reduced, while also calling for the same for a non-adjustable advance income tax (AIT) applied to associated imports and sales.
During a press conference, reported upon by the Financial Express newspaper and other media, BCMA president Alamgir Kabir said that the customs duty on key raw materials for the sector had previously been around 5% of the import value. However, he argued that the new suggested increased tariff was “disproportionate” because it placed the burden at 12 - 13%. He urged the government to treat the cement sector as a "priority sector" given that it was facing higher prices generally due to the aftermath of the Covid-19 pandemic, the energy shocks from the Russian invasion of Ukraine and negative currency exchange effects.
The BCMA’s latest lobbying call may sound familiar because it follows a similar battle against import charges from late 2022. A supplementary duty was introduced in November 2022 when the National Board of Revenue (NBR) changed the way limestone was coded in response to a significant increase in imports from 2020. At the time, the price of limestone imports reportedly nearly doubled. The BCMA may have won this battle because in March 2023 the NBR withdrew its supplementary duty. It did require that importers submit to further scrutiny including an updated Import Registration Certificate and various tax related requirements.
The timing of the NBR’s decision to relax the limestone duty is telling given that the previous month or so six of the country’s seven publicly listed cement producers reported either falling profits or losses for the second half of 2022 or the year as a whole. Only LafargeHolcim Bangladesh bucked the trend with an increase year-on-year in its annual profit after tax in 2022, although it attributed this to 95% volume growth in its aggregates business.
As discussed previously a characteristic of the cement sector in Bangladesh is that the country has no domestic limestone reserves. It all has to be imported. Arusha Ahmed Khan, Shun Shing Group presented a summary of the national industry at the Global Slag Conference that took place in early June 2023 in Düsseldorf. The country has two integrated cement plants and 36 grinding mills operated by 31 companies with a total capacity of 84Mt/yr. At present around 14Mt/yr of new cement grinding production capacity is planned by UK Bangla Cement, MI Cement, Confidence Cement and Dubai Bangla with commissioning dates expected from mid-2023 to mid-2025. Khan revealed that the government switched from British to European standards in the early 2000s leading to a high level (95%) of blended cements on the market. Use of slag cements has grown as more producers commission vertical roller mills and more uptake of slag and other blended cements using secondary cementitious materials (SCM) is expected in the future.
A key vulnerability for a grinding-heavy cement sector, like the one in Bangladesh, is any burden on imports such as logistic costs, currency exchange effects and government tariffs. Sure enough each of these examples has been reported locally. The government says that its proposed higher import tariff on clinker is the first such change in a decade. Cement producers have reacted, predictably, in a negative manner. Whether the authorities go ahead with the planned increase and how well the cement sector could absorb it remains to be seen. There may never be a good time for a tax rise but the BCMA has been able to present the current period as being especially bad.
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EU and European ambassadors urge Bangladesh to lift restrictions on LafargeHolcim Bangladesh limestone sales
10 February 2023Bangladesh: The European Union (EU) and Spanish ambassadors and Swiss chargé d'affaires to Bangladesh have formally requested that Bangladeshi authorities lift all restrictions on LafargeHolcim Bangladesh's sale of crushed limestone in the country. The Financial Express newspaper has reported that Bangladeshi court previously ruled in favour of LafargeHolcim Bangladesh's right to sell its crushed limestone 'on the open market' on 5 January 2022. Limestone Importers and Suppliers Group had challenged the legal status of such sales, given that the raw limestone used in LafargeHolcim Bangladesh's produces its crushed limestone production is imported from India.
The Bangladesh government granted LafargeHolcim Bangladesh, a subsidiary of Switzerland-based Holcim, a temporary licence to resume its crushed limestone operations on 27 March 2022. This resulted in protests by local limestone producers.
Update on Bangladesh, November 2022
16 November 2022The Infrastructure Development Company in Bangladesh announced this week that it had agreed to loan Crown Cement US$25m to help it add a new mill to its cement grinding plant at Munshiganj, south of Dhaka. If completed it will be the plant’s sixth mill. Originally known as MI Cement the plant has a production capacity of 3.3Mt/yr and the most recent mill was added in 2017. The plan to add a sixth mill dates back to 2019 but was revised in 2021 with a total investment of US$90m. Securing a loan marks a significant step forward for the project.
The timing to expand a cement plant in Bangladesh is interesting given the problems facing the local cement sector. In August 2022 Mohammed Alamgir Kabir, the president of the Bangladesh Cement Manufacturers Association (BCMA), told the Daily Star newspaper that cement producers were facing both falling investment in infrastructure development and private projects. The local cement industry imports 90% of the raw materials it uses and most of the country’s cement plants grind cement use imported clinker. However, the aftermath of the coronavirus pandemic created supply chain problems leading to higher costs of raw materials, dearer transportation charges and started to push up global energy prices. This was then exacerbated by the Russian invasion of Ukraine in February 2022 and negative currency exchange effects as the Bangladeshi Taka fell in value against the US Dollar. In words echoing cement associations in other parts of the world, Kabir suggested that cement producers now faced the option of either continuing to raise prices or simply shutting down production.
The local cement production capacity utilisation rate appears to be around 56% based on data from a recent feature in the Financial Express newspaper. It placed total production capacity at 83Mt/yr from 37 active plants but demand at only 47Mt/yr. This is similar to the reported utilisation rate of 54% back in 2017 from a total production capacity of 50Mt/yr. Data from the Bangladesh Bureau of Statistics (BBS) suggests that cement production picked up in 2021 but then declined on a monthly year-to-date basis between December 2021 and February 2022. However, the BBS only reports production from a sample of plants. Masud Khan, the chief advisor to Crown Cement and its former chief executive officer, placed the cost of all that unused capacity at US$40/t or something like an investment of US$1.46bn for idle manufacturing potential. In his view, the larger local producers forecast an increase in demand around five to 10 years ago and invested accordingly to avoid losing market share. However, some smaller companies may also have done the same.
The local sector has likely been able to cope with a relatively low capacity utilisation rate previously because it was ‘grinding heavy.‘ How the current problems have shown themselves on cement company balance sheets has been mixed though. LafargeHolcim Bangladesh’s sales revenue and profit grew by 8% year-on-year to US$166m and 7% to US$32.2m in the nine months to September 2022. It was probably able to do this, in part, due to the fact that it operates one the few integrated plants in the country and it has direct access to limestone reserves across the border in India. By contrast, HeidelbergCement Bangladesh’s sales fell by 3% year-on-year to US$90.7m in the first six months of 2021 and it made a loss of around US$2m. Aramit Cement’s revenue fell by 60% year-on-year to US$6.09m in the nine months to March 2022 and it reported a loss. Premier Cement Mills increased its revenue by 5% to US$99m in the same period, although its net profit dropped by 91% to US$387,000. Crown Cement’s revenue rose by 16% to US$13m but its net profit fell by 81% to US$1.32m.
Geopolitics, high energy prices and local problems are all combining to make life difficult for cement producers in Bangladesh. As the market adjusts to the current situation the determining factor here is likely to be the cost of grinding cement to end users versus just importing cement directly. Current conditions do not seem to be stopping Crown Cement though nor LafargeHolcim Bangladesh. The latter, for example, launched a new blended cement product, Supercrete Plus, earlier in November 2022. One way out for the others might be explore exports and the BCMA suggested just that to the government over the summer, although this doesn’t seem like the most obvious solution for a country that imports so much of its raw materials.
India: Shree Cement has appointed Neeraj Akhoury as its designated managing director. Hari Mohan Bangur has also been appointed as chair and Prashant Bangur as Vice Chair. All these personnel changes are subject to approval by the members of the company. In addition, Gopal Bangur has resigned as chair and will become Chairman Emeritus.
Akhoury holds nearly 30 years of professional experience in the cement and steel sectors. He began his career in 1993 at Tata Steel, working for both the cement and steel divisions. He joined Lafarge India in 1999 and worked as member of the Executive Committee responsible for corporate affairs followed by sales. In 2011, he moved to Nigeria as the head of Lafarge AshakaCem. Later, he was appointed as Strategy & Business Development Director for the Middle East & Africa at Lafarge’s headquarters in Paris. He became the head of LafargeHolcim Bangladesh in 2015 and then was appointed as the head of ACC in 2017 and Ambuja Cement in 2020.
Akhoury is a graduate in economics from Allahabad University and holds a Master of Business Administration (MBA) from the University of Liverpool. He has also studied one-year General Management Program at XLRI Jamshedpur and is an alumunus of Harvard Business School.
LafargeHolcim Bangladesh increases sales and profit in 2021
04 February 2022Bangladesh: LafargeHolcim Bangladesh’s full-year sales were US$243m in 2021, up by 27% year-on-year. Its net profit was US$45.8m in 2021, up by 64%, according to the New Nation newspaper.
During the year, LafargeHolcim Bangladesh launched its new Water Protect and Shokti cements and continued to accelerate alternative fuel (AF) co-processing across its cement plant network.
LafargeHolcim Bangladesh launches Holcim Shokti cement
28 October 2021Bangladesh: LafargeHolcim Bangladesh has launched a new early strength rapid set cement known as Holcim Shokti. The company said that the product is the first on the Bangladeshi market to use rapid set technology to enhance its early strength by 50% within 48 hours, reduce its setting time by 15 – 25% and optimise water requirements. The producer estimates that project costs will fall by US$16.4/t of Holcim Shokti cement used compared to those of projects using ordinary Portland cement (OPC).
Holcim Shokti cement is available across Bangladesh in bagged form.
Bangladesh: LafargeHolcim Bangladesh has unveiled new branding for its Holcim Strong Structure cement product. The subsidiary of Switzerland-based Holcim presented launching the new packaging to distributors and retailers at a virtual event.
Chief executive officer Rajesh Surana said, "LafargeHolcim Bangladesh always emphasises innovation and customer satisfaction. As a part of this, we are unveiling the new look of our Holcim Strong Structure bag. The new look of the bag is really attractive and reflects our stronger brand image and product differentiation. We are committed to providing the best product, for our customers to build their dream homes.”
Bangladesh: LafargeHolcim Bangladesh has unveiled its Supercrete Portland limestone cement (PLC) bag redesign. The new bag features the tagline ‘Top quality, proper construction’ in Bengali. The Switzerland-based LafargeHolcim subsidiary produces the cement with limestone from Meghalaya, India. It says that its product is the only PLC on the Bangladeshi market.
Bangladesh: Protesters in Chhatak, Sunamganj District have accused LafargeHolcim Bangladesh of selling limestone illegally. The New Nation newspaper has reported that protesters allege that the company sold imported Indian limestone on the open market. They allege that the limestone was imported exclusively for use as a raw material in cement production under Bangladeshi tax law.