Cement makers Crown and Premier post stellar growth despite economic slowdown

Infographic: TBS

Despite challenges, including inflation, foreign currency shortage, interest rate hikes, and utility availability constraints, faced by the country's cement industry, two manufacturers — Crown Cement and Premier Cement — performed remarkably well in October-December of the fiscal year 2023-24.

Seven companies are listed on the stock market under the cement sector, and among them, six have published their financial statements. Heidelberg Cement is the only company yet to publish its financial statement.

Among the six companies, only Crown Cement and Premier Cement showed growth in both revenue and profit in the second quarter of FY24.

Even LafargeHolcim Bangladesh, which achieved record revenue and profit in the year 2023, which ended on 31 December, could not secure growth in profit during the December quarter.

According to their financial statements, Aramit Cement and Confidence Cement incurred losses in the second quarter. Additionally, Meghna Cement witnessed a significant fall in both revenue and profit compared to the same period in the previous year.

Crown Cement reported the highest revenue among its peers, achieving a remarkable 14% growth and reaching Tk815 crore in the last three months of 2023. Additionally, its net profit saw a significant increase, jumping by 121% to reach Tk36 crore compared to the same quarter of the previous year.

Molla Mohammad Majnu, managing director of Crown Cement, told TBS, "Despite a slowdown in the cement industry, we performed well. The primary reasons for our success lie in establishing a strong brand identity and prioritising exceptional customer service. These factors have set us apart from our competitors."

He further said, "Despite the economic slowdown and a reduction in government projects, we remain unaffected, as we are not extensively involved in such initiatives. Our product prices are higher than government quotations, and we are not actively pursuing government projects."

Mohammad Majnu went on to say, "Moreover, the robust demand for cement nationwide has allowed us to maximise the production capacity of our factory, surpassing industry standards."

Premier Cement witnessed over a 28-fold jump in net profit year-on-year in the second quarter of the current fiscal year supported by a buoyant growth in revenues.

In the quarter, its revenue surged by 29% to reach Tk662 crore riding on a 23% growth in the volume of sales to 8.20 lakh tonnes, as per the company's financial statement.

Mohammed Amirul Haque, managing director of Premier Cement, termed the performance "admirable" amid challenges across the industries stemming from inflation and foreign currency shortage.

During the December quarter, LafargeHolcim Bangladesh reported a 2% growth in revenue, reaching Tk674 crore. However, its net profit dropped by 36% to Tk73 crore.

According to industry insiders, the cement industry experienced negative growth, attributed to various factors including significant reduction of large-scale infrastructure development projects in the country.

The current economic conditions, particularly the forex crisis and subsequent devaluation of the taka, higher bank interest rates, increased transportation and power costs increased the business cost, they say.

In terms of the annual average, production of the key construction material dropped to 25 lakh tonnes per month in 2023 while it was 36 lakh tonnes per month the previous year.