Cement
Cement is a binder. a substance that sets and hardens independently. and can adhere other stuffs together. The word “cement” hints to the Romans. who used the term musical composition caementicium to depict masonry resembling modern concrete that was made from crushed stone with burned calcium hydroxide as binder. The volcanic ash and pulverized brick additives that were added to the burnt calcium hydroxide to obtain a hydraulic binder were subsequently referred to as cementum. cimentum. cament. and cement. Cements used in building can be characterized as being either hydraulic or non-hydraulic. Hydraulic cements ( e. g. . Portland cement ) harden because of hydration. a chemical reaction between the anhydrous cement pulverization and H2O. Therefore. they can indurate underwater or when invariably exposed to wet conditions. The chemical reaction consequences in hydrates that are non really water-soluble and so are quite lasting in H2O. Non-hydraulic cements do non indurate underwater ; for illustration. slaked calcium hydroxides harden by reaction with atmospheric C dioxide. The most of import utilizations of cement are as an ingredient in the production of howitzer in masonry. and of concrete. a combination of cement and an sum to organize a strong edifice stuff. .
Bangladesh cement industry is the fortieth largest market in the universe. Currently capacity of the industry is about 20 manganese tones ( MT ) . Top 13 participants are entirely commanding over 78 % of the entire industry capacity. However. the balance capacity still remains rather disconnected. Per capita ingestion remains hapless when compared with the universe norm ; merely 65 kilograms ( FY2009 ) while our adjacent states. India and Pakistan. have per capita ingestion of 135kg and 130kg severally. This underlines enormous range for growing in the Bangladesh cement industry in the long term. Cement. being a majority trade good. is a freight intensive industry and transporting it over long distances can turn out to be wasteful. For that ground. industry is regional in nature. It’s besides seasonal in nature. during Monsoon industry suffers from low demand. Four major costs are associated with the production of cement as provided:
The pricing of cement of assorted participants in the industry are really near to one another. The mills which would be utilizing confined power ( which is cheaper and more dependable than grid power ) and backed by uninterrupted cinder supply at competitory monetary value. are likely to be more cost efficient to emerge as the market leader. Presently. the standard monetary value of one bag of cement produced by the transnational cement companies ranges within BDT 370 to BDT 390 per bag. On the other manus. monetary value of one bag of cement produced by the local companies? ranges within the monetary value bracket of BDT 340 to BDT 365.
The common engineering which is widely used in our industry from the twelvemonth 2003 is Portland Composite Cement ( PCC ) which is made following European Standard Methods ( ESM ) . Earlier. Ordinary Portland Cement ( OPC ) had been used which was made following the American Standard Method ( ASM ) . PCC gives equal strength and lastingness like OPC. The basic difference between them is in the fabrication engineering. Merely 65 % -80 % of cinder is required to bring forth PCC while 95 % of cinder is required to bring forth OPC. So. worldwide PCC has become popular which requires less cinder.
Presently. Heidelberg. Holcim and Lafarge are the leaders among transnational cement Manufacturers and Shah and Meghna are the taking domestic makers. Shah cement is the Market leader with close to 14. 20 % of the market portion. followed by Heidelberg with approximately 9. 30 % of the market portion. During the 2010. many little local makers like Premier. Seven Circle. Crown. Fresh and King cement increased their gross revenues drastically siting on their benefits of economic systems of graduated table. backward linkage and aggressive selling attempt.
In Bangladesh. cement consumers are categorized as follows:
1. Individual place shapers ( 25 % )
2. Real estate developers ( 35 % )
3. Govt. organisations. i. e. . LGED. RHW etc. ( 40 % )
Cement ingestion ( kilogram ) per capital
Cement ingestion has steadily been lifting. It is expected that cement
companies will bask a good growing of border over the following 3 old ages. Because. in following twosome of old ages when big capacities are expected to come on-stream. base on balls through of input cost will be easier and cinder ( chief natural stuff of cement ) monetary value is expected to stay stable at $ 53- $ 58. Presently. transnational cement companies are confronting intensive competition with local companies. Local makers have been prosecuting more advanced and aggressive concern scheme compared to multinationals. Local makers seek to prehend big market by making mass people through economic systems of graduated table while multinationals cater the demands of specific group of clients by bear downing high monetary value through superior trade name value and quality. In add-on. another basic tendency in cement industry is smaller companies are closing down and the bigger companies are going bigger. Leading cement makers are now traveling for enlargement. It is expected that if the on-going enlargement programs complete within FY2011. the entire production capacity of the industry will lift by 61 % . Cement industry expects the ingestion to lift by 25 % ( it will be much higher if Government undertakings come on watercourse ) . Though it seems that the industry will run overcapacity but as mentioned earlier. industry is dependent on merely 13 companies? production. So it reveals that the cement industry will fall short of supply if the demand increases in line with the large infrastructural undertakings of Government as expected in future and this symbolizes the immense growing potency of our cement industry.
Sing the „Life rhythm of the industry? . presently cement industry of Bangladesh is in the growing phase. Gross saless of cement are increasing due to turning demand for cement in both the local and foreign markets. The industry realized approximately 30 % and 21 % growing in 2009 and 2010 severally after suppressed demand from old old ages. Industry expected demand growing is 20 % -25 % for the following three old ages based on the premises below.
1. Government would be able to happen its of import ADP.
2. Harmonizing to the UN Population Fund ( UNFPA ) study 2010. 28 % people of our state live in urban countries where the population growing is 3. 2 per 1000.
Urbanization and demand for adjustment are increasing twenty-four hours by twenty-four hours. Thus it is expected that the existent sector will turn steadily with the family users? increasing cement ingestion form.
3. Private sector may acquire interested to put in existent estate for acquiring revenue enhancement advantages of their unrevealed financess
4. Good figure of big substructure building undertakings ( Padma Bridge. Flyovers. and main roads ) is on the grapevine.
5. There is no “Substitute” for Cement. Steel can be used in building but in limited extent due to its high cost. On the impudent side. some cautiousness has to be maintained due to the current demand- supply spread taking to over capacity and falling borders and monetary values. Besides. given the close linkages between them. the consequence of a lag in existent estate growing or hiking in involvement rates globally or monetary value addition of imported natural stuffs should besides be considered.
ACRONYMS AND ABBREVIATIONS
ASM = American Standard Method
BCMA= Bangladesh Cement Manufacturing Association
CNF = Cost & A ; Freight
ESM = European Standard Methods
OPC = Ordinary Portland Cement
PCC = Portland Composite Cement
UNFPA = UN Population Fund
Cement Industry Overview
Development of cement industry in Bangladesh day of the months back to the early-fifties but its growing in existent sense started merely about a decennary. The state has been sing an rush in cement Consumption for the last five old ages. Government gave permission for set uping cement industries in Bangladesh in FY1995. Initially the cement industry took topographic point without the proper analysis of the demand and supply of cement in the. Within the span of the
two to three old ages. industry attained expanded capacity of the merchandise with stable growing rate of ingestion.
There were chiefly four dominant participants in the cement industry in the twelvemonth 1998 that produced their ain cement to run into the demand of their clients. These companies were:
Meghna Cement ( owned by Bashundhara group )
Eastern Cement ( presently known as Seven Horse )
Chatok Cement
Chittagong Cement ( taken over by Heidelberg where the local trade name is called Ruby )
After a decennary. presently 123 companies are listed as cement makers in the state. Among them 63 have existent production capacity while 32 are in operation. The current installed capacity of the industry is 20. 0 mn MT. This installed capacity has been calculated under two conditions below:
1. All mills are in operation
2. Production is at its extremum season
Though the installed capacity is 20. 0 mn MT. presently the existent capacity is about 13. 96 manganese MT due to provide restraints for power and cinders.
Overview of cement industry
Industry Demand & A ; Production scenario
Manufacturers and consumer of the industry:
Major manufacturer of the industry:
The largest 13 cement makers hold 78 % of the market portion. Heidelberg. Holcim and Lafarge are the leaders among transnational cement makers and Shah and Meghna are the taking domestic makers. Shah cement is the market leader with close to 14. 20 % of the market portion. closely followed by Heidelberg with approximately 9. 30 % of the market portion. During the 2010. manyVsmall local makers like Premier. Seven Circle. Crown. Fresh and King cement increased their gross revenues drastically siting on their benefits of economic systems of graduated table. backward linkage and aggressive selling Effort.
Market portion of major cement companies
Current and approaching capacity of running cement industry of Bangladesh Running industry nowadays capacity likely capacity entire capacity
Industry mentality in FY2012 2010 2012
Entire installed capacity ( mn MT )
Actual capacity ( mn MT )
Entire Demand ( mn MT )
Major consumer of this industry:
In Bangladesh. the chief cement consumers are:
1. Individual place shapers
2. Real estate developers
3. Govt. organisations. i. e. . LGED. RHW etc.
Real estate developers and Govt. undertakings are the dominant users of cement. During 2007-2008 public sector building plants were slowed down under caretaker authorities. Unwillingness to unwrap the beginning of income contributed to the downward tendency in existent estate sector. i. e. . edifice of flats. flats etc. during that clip period.
Major user group of cement
Persons 25 %
Real province developers 35 %
Government undertaking 40 %
Export OF CEMENT: Size OF EXPORT IS 260 K MT/YEAR
Cement industry started export from FY2007. Currently. companies exporting cement to north- Eastern provinces of India are as below:
Shah Cement
Holcim Bangladesh Limited
Seven Circle
Unique Cement
MI Cement
Assurance Cement
Premier Cement
Aramit
All these companies are exporting in really low measure to the adjacent states ( India and Myanmar ) which are easy accessible through H2O transit such as ships and female parent vass. Transportation system cost is major concern to export cement. Therefore exporting this merchandise to states which are approachable through linking H2O organic structures is much more executable in footings of cost and handiness. High responsibility charge is one of the chief stumbling-block of cement export. Cement makers in our state bring forth cement by importing cinder from China and Indonesia ( chiefly ) at a high rate of transporting cost and responsibilities which make the present cost construction infeasible to tap the export potencies for cement. If the authorities make the responsibility construction more industry-friendly by relieving some responsibilities on exportable cement and allowing hard currency inducements. cement exporting to SriLanka. Nepal. Bhutan and the Middle Eastern ( ME ) states will be executable in future.
Steady growing borders:
In following twosome of old ages when big capacities are expected to come on-stream. base on balls through of input cost will be easier. Furthermore. cinder ( chief natural stuff of cement ) monetary value is expected to stay stable at $ 53- $ 58. Therefore. it’s been expected that cement companies will bask a good growing
of border over the following 3 old ages.
Current scenario of the industry:
Laterality by local companies
Presently. transnational cement companies are confronting intensive competition with local companies. Lafarge. Cemex. Holcim and Heidelberg are among the top 10 cement companies in the universe. but together they make up merely about 27 % of the Bangladesh market. Scancement of Heidelberg Group is the biggest among the foreign companies. but its market portion is Around 9. 3 % despite it has been in Bangladesh for about a decennary. Holcim’s market portion is about 6. 4 % despite it bought three workss in speedy sequence more than half a decennary back as it planned to emerge as the top participant in the state. Lafarge and Cemex. the world’s foremost and the 2nd largest cement companies have been fighting to last in the industry. Local companies are catching the top slot of the industry by runing in economic system of graduated table and with dexterous selling scheme.
For illustration. Shah Cement. a subordinate of the country’s biggest pudding stone Abul Khaer Group is now in the top of the industry crushing Heidelberg and Holcim by deploying a fleet of trucks in the chief growing countries and constructing the best selling web in the state. Local companies are puting in backward linkages ( confined power workss ) . have built large workss to cut down cost of production and have a fleet of trucks to transport the merchandises right to the doorsills of consumers. Quality-wise besides. the local companies have made rapid paces. Multinationals bear high operating expense costs sing salary. substructure. quality control etc. On the other manus. local companies are more focussed to maintain the overhead costs low. Multinationals are merely concentrating in supplying high quality merchandises. But local companies are concentrating in offering quality merchandise with extra benefits like place bringing system. discount. gifts etc. Local makers have been prosecuting more advanced and aggressive concern scheme compared to multinationals. Local makers seek to prehend big market by making mass people through economic systems of graduated table while multinationals cater the demands of specific group of clients by bear downing high monetary value through superior trade name value and quality.
Industry Survivors: Large Companies
During last five old ages about 32 cement companies have been shut down due to insufficiency of natural stuffs. Its excessively hard to the little makers to last in the industry due to the deficit of natural stuffs since little companies face troubles to set up the natural stuffs in competitory monetary value. Currently. the basic tendency in cement industry is smaller companies are closing down and the bigger companies are going bigger. Merely 10-15 companies are keeping 80 % of market portion.
Future mentality of cement industry of Bangladesh
Sing the „Life rhythm of the industry? . presently cement industry of Bangladesh is in the growing phase. Gross saless of cement are increasing due to an tremendous demand for cement in both the local and foreign markets. The industry realized approximately 30 % and 21 % growing in 2009 and 2010 severally after suppressed demand from old old ages.
Industry expected demand growing is 20 % -25 % for the following three old ages based on the premises below.
1. Government would be able to happen its of import ADP of edifice large substructure undertakings.
2. Harmonizing to the UN Population Fund ( UNFPA ) study 2010. 28 % people of our state live in urban countries where the population growing is 3. 2 per 1000. Urbanization and demand for adjustment is increasing twenty-four hours by twenty-four hours. Thus it is expected that the existent sector will turn steadily with the family users? increasing cement ingestion form.
3. Private sector may acquire interested to put in existent estate for acquiring revenue enhancement advantages of their undeclared financess
4. Good figure of big substructure building undertakings ( Padma Bridge. Flyovers. and main roads ) is on the grapevine.
5. There is no “Substitute” for Cement. Steel can be used in building but
in limited extent due to its high cost.
On the impudent side. some cautiousness has to be maintained due to the current demand- supply spread taking to over capacity and falling borders and monetary values. Besides. given the close linkages between them. the consequence of a lag in existent estate growing or hiking in involvement rates globally or monetary value addition of imported natural stuffs should besides be considered.
CONCLUDING Remark
The cement industry is likely to keep its current growing impulse and go on turning at around 20 % to 25 % in the medium to long term. Government initiatives in the substructure sector and the lodging sector are likely to be the chief growing drivers. Our cement ingestion per twelvemonth was merely 65kg in FY2009 whereas. in India its 135 kilogram and in Pakistan its 130kg. So there is a batch of chance to turn in this industry. If the import responsibility construction of assorted cement merchandises. e. g. finished cement. semi-finished cement and basic natural stuffs for cement ( 25 % . 12 % and 7 % severally ) continues i. e. import responsibilities is on favour of the local makers and the building sector remains dining with smooth power supply than nil to be surprised that cement industry will be the most evolving industry in the following three to five old ages. The importance of the lodging sector in cement demand can be gauged from the fact that it consumes about 60 % -65 % of the country’s cement. If lodging sector growing ebbs. it would impact the growing in ingestion of cement. taking to demand supply mismatch.
