Cement companies see profit rise in Q1 despite pandemic

The Daily Star  January 12, 2021

Most listed cement makers witnessed higher profits in the July-September quarter last year thanks to an increase in demand from the construction sector amid the ongoing coronavirus pandemic.

Among the seven listed cement makers, four saw a rise in profits, one a fall, another a reduction of losses and the last an increase in losses.

Government development projects helped the cement makers stay afloat in the first few days of the quarter, when the private sector was yet to resume any construction, according to cement makers.

On the other hand, the companies that digitalised their systems fared quite well.

“Our efforts on health, cost, and cash have ensured that we stay focused during the crisis, while our fast progress on digitalisation helped us be effective in the marketplace,” said Rajesh Kumar Surana, CEO and country representative of LafargeHolcim Bangladesh.

Mohamamd Amirul Haque, managing director of Premier Cement, said cement makers made a profit in the first quarter of FY20-21 as sales had increased compared to that in the previous quarters.

The government development activities resumed in full swing in the last quarters of the year, which created a demand for cement, he said.

According to him, Premier Cement has orders from 57 development projects, including mega projects such as those of the Rooppur nuclear power plant and Karnaphuli tunnel.

Besides, the manufacturers tried hard and put in their best efforts to reach pre-pandemic levels in sales, Haque said.

So even amid the pandemic, where cement makers incurred huge losses, it was easy for them to quickly recover, he added.

Zahir Uddin Ahmed, managing director of Confidence Cement, said the company’s profit margin slightly increased during the July-September quarter in 2020 as private and government construction work had resumed.

Besides, most of the construction works were stuck during the pandemic lockdown but resumed in September last year.

He also said the government incentive package helped the sector recover from the crisis.

The pandemic hit almost all sectors of the country and cement was no exception. The industry was worst hit in the May-June period, said Abdullah Hujaifah, a stock market analyst and a high net-worth investor.

In the July-September quarter, the companies made a rebound riding on the resumption of construction activities especially in the government sector, he said.

This is a good sign that construction related products’ consumption is on the rise because it indicates that the country’s economy is bouncing back, Hujaifah added.

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