CEE Oct-Dec 2002

3.50 License De\. fee Surcharge Adv. 3.00 Deve- Income Ta'\ lop Ment surch- arge Licen~c Ice 2.50 PSI charge Total 99.75 Total duty Payment Lal~trge ,.,as the first to enter in 1997 and is in the procl!ss ofserting up an integrated cement plant of 1.2 million tpa in Sunamgonj district in the north-cast. This wil l be the country"s single largest modern integratcu cement plant. Lafarge w ill extract and process limestone ti·om its own quarry in Mcghalaya. India, which will be transported to its plant in Bangladesh with a 17 km cross-border conveyor belt. It '"itI have adequate infrastructural facilities to double the capacity to 2.4 million tpa and is likely to be in production by the end of2004. The project cost is US$ 2-10 mi l lion. The \\Orld's leading multi latera l financial institutions including IFC, 1\ DR, European I nvestment Bank, DEG-German Investment and Development Co. and the Netherland's Development Finance Co (FMO). are fi nanc i ng thi s project. Holcim has purchased Hyundai C cment Co. and has taken over t" o other pl an ts re sul ti ng in a tota l production capacity of 1.1 mi ll ion tpa . 0.00% 0.00 Grinding Co. Ltd., considered as one of the best cement pl ants i n the country, and took over the management as majo ri ty shareholders. of (asses- ment \alue+ lmpot Duty) 3.50% 3.57 1% or 1.0 I C'RF value 27.53 'Yo March 200 1. Cemex has taken over a c li nker g ri nd ing facility near Dhaka with a capacity of nearl y 500 000 tpa. Th is began production 1n With tile exception of Lafarge, state-owned Chhatak Cement and the small plant. Ayenpur Cement. all other plants are clinker grinding plants, which process imported clinker as the main raw material. The logistics and management of clinker supply is a key factor for successful operation of the plants. Most of the imported clinker comes from Thailand. Indonesia, Malaysia and India. The po si bility of loca l companies facing the problem of interrupted supply ofclinker as well as uncompetitive prices can not be precluded. Clinker imponed form India, which is the source ofseveral small plants, i s reported to be relatively costl ier. The average wholesale price of cemen t in the country for the period January 1997 to April 2002. was hovering around US$ I I 0. during January 1997 to January 1998. The price has dipped to US$ 70/t. which is a decline of 36%, over 5 years. T he price reduction is mainl y caused by the following factors: llcidelberg Cement has • Fierce competi ti on due to excessive local production. acquired a·clinker grind ing plant ncar Dhaka with a capacity of 750000 tpa which was started by Scancem International A NS. Norway, in 1998. It also purchased Chillag.ong Cement C l inker • Devaluation of local currency (Taka) against the dollar. With a fu rt he r i ncrease in production capacities in the coming years, the sell ing price of cement is 63 likely to dip further. Whereas. the cost of production will remain the same or become higher due to devaluation or local currency and increasing raw material prices. if bagged ore continues to be produced. The Bangladesh standard allows 30% of slag intergrincling with cl inker to produce slag cement. 15% of PF 1\ i nterg rincling with clinker isallowed to produce ny ash cement as per the Bang l adesh standard. Whilst the C&r: price of clinker is approximately US$ 28-30/t. fly ash is about US$ I '2 /t. If the manufacturers use 15%ofPFA with clinker. the per-ton production cost can be reduced by US$3.00. On the other hand. if the demand of cement is 6 million t for '200'2 - 2003, 15% use of fly ash will require 900 000 t of lly ash. Therefore a saving or approximately US$ 15 million in foreign currency is achieved. For a coun try such as Bangladesh v\here the export-import gap is huge, this saving will have a very positive impact on the economy. In order to deli ver I t ofcement, the cost of the bag is US$5.00. In devel oped countries. most deliveries are carried ou1 as bulk cement. In Bangladesh, the concept ofbu lk delivery may be popularised in all heavy construction work as far as poss ible. Almost 40 %or total construction work is heavy indust r ial or mu ltistor ied construction and to an extent can be served by delivering bulk cement. If the annual estimated consumption of cement for 2002- 2003 is 6 million t. almost 50% or the total consumption, i.e. 3 mill ion t are expected to be in and around Dhaka. I n developed as well as developing . countries. approxima tely 60% or the total cement is used to produce concrete. So only in and around Dhaka about 1.8 mi llion tor cement wi ll be used