- In last 2 months, rod sales have fallen by 50-70 pc, cement 35-40 pc
- Production cost of per ton rod Tk 1 lakh 10K to 12K, but sale Tk 86K
- Govt dev projects, housing business down, so as construction materials market
After the July uprising, there is stagnation in country's real estate and construction market. As a consequence, the construction materials markets are collapsing in the country.
At present most of the development projects of the government have been stopped and there has been stagnation in the private housing industry as well. As a result, there has been stagnation in the business of the producers and traders of the two main construction materials, rods and cement.
In the last two months, rod sales have fallen by 50-70 percent and cement sales by 35-40 percent, depending on the company. In such a situation, rod and cement companies have been forced to reduce production due to reduced sales. This information is known from sources related to cement and steel sector.
According to related sources, after the change of government, the work of major development projects of the country has slowed down. Many contractors involved in the construction work have covered their heads. Stagnation has also occurred in the upazila and union level development work from the city corporation. Apart from this, sales and new projects in the housing sector have also decreased due to the prevailing situation and DAP. The sale of rod-cement has drastically reduced. As a result, most entrepreneurs in those two sectors are suffering from uncertainty. According to them, sustaining the business is now the biggest challenge. There is no question of new investment.
According to the sources, the rod is currently being sold at Tk 86,000 to 87,000 per ton in the market. Last May-June the price of rod was more than Tk 90 thousand. And compared to May-June, the price of cement has decreased by Tk 20-25 per sack (50 kg). In the last two months, rod sales have fallen by 60-70 percent. As a result, many businessmen related to the sector are not able to pay the bank loan installments on time. It increases the risk of defaulting again. Because currently the production cost of 1 ton of rod is Tk 1 lakh 10 thousand to Tk 1 lakh 12 thousand, but it is selling for Tk 86 thousand. In the existing situation, some companies are selling rods for Tk 80 thousand.
Currently rod sales are down more than 50 percent. Demand in the market is very low. Banks are now providing facilities only to large industrial groups. Medium companies are not getting that support. If this continues, many companies may close down. The number of steel factories in the country is about two hundred. 40 of them are big companies. The institutes have an annual production capacity of about 10 million metric tons of rods. Although the annual consumption of rods in the country is 75 lakh tons. So far Tk 75 thousand crores of have been invested in this sector. Annual transaction volume is Tk 70 thousand crore.
Sources also said that instead of growth, the cement business is currently experiencing negative growth (de-growth). But the loan interest rate has increased. The cost of production has also increased. But due to reduced demand, the additional cost has to be adjusted. As a result, the country's cement industry is under threat. There are 40 cement manufacturing companies in the country. Those institutions have the capacity to produce about 7 crore 80 lakh tonnes against the demand of about 4 crore tonnes of cement every year.
Many companies have now reduced production due to reduced sales. The interim government has not taken up any development projects so far. As a result, it is assumed that there will be no development projects until the political government comes. All in all, businessmen are suffering from some kind of uncertainty. Rooppur nuclear power plant, Padma bridge, Karnaphuli tunnel and all major mega projects of the country are supplied by the cement producing companies in the country. The company's cement sales in the last July-September quarter have fallen drastically compared to the previous quarter (March-June).
Meanwhile, regarding the rod market, BSMA president and managing director of GPH Ispat Mohammad Jahangir Alam said that the steel sector has been suffering from various problems for a long time. The big problem in the last two years was the dollar crisis and price rise. But the dollar market is fairly stable now. Now the new problem has come to the fore is the reduced demand for the product. In the last two months, rod sales have fallen by 60-70 percent. Also, the sale of cement has decreased by 40 percent compared to the normal period. In the current situation, many businessmen are unable to repay the bank loan installments on time. As a result, the risk of defaulting again increases.
On the other hand, the managing director (MD) of cement producer Premier Cement Amirul Haque said that the sales have decreased mainly due to two reasons. First, some major infrastructure projects have stopped. Secondly, various construction works have stopped due to leadership vacuum from City Corporation to union level. As a result, instead of growth, there has been downturn in the cement business.
ZH
