Navigate carefully, 2023 will be challenging for businesses: Naba E Zaheer

Established in 1968 as a railway contractor, Mir Akhter Hossain Ltd has now turned into a key construction firm in Bangladesh, being part of the construction of many major roads, bridges and other notable establishments, such as the Radisson Blu Dhaka and Krishibid Institution.

Its concern Mir Cement Ltd has also made a name in the local market. At a time when other cement producers are witnessing a slump in sales as the entire economy braces for turbulent times, Mir Cement is ready for business expansion.

Naba E Zaheer, managing director of Mir Cement Ltd, tells Sharier Khan, executive editor of The Business Standard, the story of Mir Akhter's beginning, journey and growth.

What is the beginning story of Mir Akhter Hossain and how was Mir Cement born?

My grandfather, the late Mir Akeb Hossain was a railway contractor. He established the Mir Akhter Company in 1968 after the name of his brother. After completing his graduation from BUET (Bangladesh University of Engineering and Technology) in 1969, my father took charge of it. Subsequently, my uncle also joined the family business. I joined the cement and concrete segment in 2014 after completing studies in marketing from Canada's York University.  

Basically, my father and my uncle together brought Mir Akhter Hossain Ltd to where it is today. My father, the late Mir Zahir Hossain, began cement production in 2002 as he thought we should have our own manufacturing unit to maintain the quality. The initial investment was around Tk60 crore. 

Similarly, other concerns were introduced gradually during the journey but our main focus still remains on construction.

What was the turning point of Mir Akhter as there was not much of a construction boom in the 1970s or 1980s?

Mir Akhter started to grow in the mid-1990s as our major projects included many highways and bridges. We built many notable structures such as the United States Embassy in Bangladesh and Radisson Blu Dhaka Water Garden. We are now constructing the Dhaka-Tangail highway, Cox's Bazar International Airport, Sylhet Airport and a part of Shahjalal International Airport.

How does Mir Cement look today?

Currently we are producing 2,400 tonnes of cement per day. We have been a very fast-growing cement company in the country. Even in the post-Covid years, we have had 30% growth. With around Tk600 crore investment, a new cement manufacturing unit is coming up by December this year, which will increase our production by one and a half times.

As far as we know, cement manufacturing is kind of oversaturated.

Yes, kind of. But we are still optimistic since our core strength is construction and cement growth is in line with that. It is a strategic decision.

You said your growth ticked up during the pandemic. Was it due to your involvement in government projects?

No. We have expanded the market further. We have increased the number of distributors. We have focused on the growing middle class who have been building new homes.   

Raw material prices are surging in the international market. A prolonged war continues causing shocks to the global supply chain. Demands are plummeting. It seems we are entering turbulent economic times next year as many predict 2023 will be a perfect storm for businesses. How do you interpret the local cement market reactions?

We too think next year will be a tough year for businesses. But there will always be such tough times and you will have to sustain it.

We had to raise cement prices by about 30% due to the rise in raw material rates. But our sales have not dropped yet. It is fairly stable. We even have a 5% year-on-year growth. People are still buying cement at higher prices.

We are now utilising around 60% of production capacity, but it is normal.

You said that sales are good even after the 30% price hike and the pandemic. How is that possible?

Maybe our market peers faced issues in opening LCs in recent months, which we did not. Maybe some of their sales have come to us. Besides, we have found new demands outside Dhaka. We have good sales in rural areas too. The northern swathe tops in our percentage-wise sales growth. Besides, infrastructural development works are going on in every part of the country.   

Do you think that growth will continue next year?

There is no doubt that 2023 will be a very challenging year. As energy costs increase, inflation could slip out of hands. There could be a dollar crunch too, though the government has already taken a number of measures.    

All we need is to be strong and make the right decision in 2023. The focus should be on salaries, raw material costs and bank payments. We need to maintain basic spending and trim other expenditures.   

In construction, what are the innovations you have introduced recently?

We are switching to automated technology from labour intensive tasks. We have developed an integrated resource plan software, which is very helpful in planning and saves time and costs. We have replaced bricks with hollow blocks.      

Are hollow blocks becoming popular? The government has set a target of phasing out typical bricks made by burning wood and coal by 2025.

Yes, hollow blocks are becoming quite popular. It also saves construction costs a lot because blocks are bigger than bricks, requiring less cement. They are lightweight, heatproof, soundproof and cost effective.

Do you have any plans on exporting cement?

We used to export cement to India's Tripura and Assam. Africa imports a lot of cement, and we could seize business opportunities. But we need government support for that.

The Business Standard Senior Staff Correspondent Rezaul Karim transcribed the interview.