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Local cement makers won’t lay off employees despite setback
Jagaran Chakma
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Cement manufacturers in Bangladesh would not lay off any employees despite the collapse in demand for the key construction material and economic uncertainties brought on by the coronavirus pandemic, said industry players.
Besides, the workers’ wages will be paid as usual, they added.
“Manufacturers will never take a decision that could prove harmful for the workers or the industry,” said Mohammad Shahidullah, managing director of Metrocem Cement.
Just a few months back, cement manufacturers found themselves in troubled waters as overproduction led to the prevalence of unhealthy competition.
Now, the industry is fighting a new challenge as the ongoing lockdown has all but dried up revenues.
Industries and businesses were initially asked to shutter their operations from March 26 until April 4 as part of the government’s measures to hold down the spread of coronavirus. The shutdown has since been extended to April 25.
Considering the current economic climate, cement manufacturers would be willing to sell their products at the manufacturing cost.
Even so, the scarcity of buyers makes it next to impossible to offload the stocks.
“However, the industry is ready to accept losses for the time being since all of Bangladesh has been hurt by the virus,” Shahidullah said.
The sector’s confidence is still intact largely because of steadily growing demand in a country where per capita consumption is very low and there has been construction spree of large infrastructure projects before the deadly bug arrived on these shores.
To complete the Padma bridge project, it is estimated that 3 million tonnes of cement will be used, while the other mega projects require similar amounts of the binding agent.
“At best, it will take two months to regain normalcy in production and sales when the crisis ends since this is not a heavily export-oriented sector,” said Mohammed Amirul Haque, managing director of Premier Cement.
Cement manufacturers are giving priority to the safety of workers, who are an integral part of the production process, he said.
Haque also echoed the sentiment that the sector is in a vulnerable state as companies still have to pay employees while generating next to no revenue.
The cement industry creates about 60,000 direct jobs and another million indirectly at any given time, he added.
Still, manufacturers will not take the cruel decisions of furloughing or terminating workers. Instead, the companies will try to recoup losses by increasing production or availing government assistance.
However, LafargeHolcim Bangladesh, the local operations of the world’s biggest cement maker, has so far been an exception.
The company has confirmed its announcement on layoff from its head office from April 12 to April 30 due to the coronavirus pandemic.
Some employees will be laid off as sales have hit rock-bottom, said an official of the company, without giving any specific number.
Meanwhile, at least 500 lighter and a few mother vessels laden with construction materials have been stranded at river and sea ports because of the pandemic, said Muhammad Alamgir Kabir, president of the Bangladesh Cement Manufacturers Association (BCMA).
The raw materials can’t be unloaded due to the barriers set by the authorities and a shortage of workers, he said.
As a result, hundreds of thousands of tonnes of the sector’s raw materials have remained unprotected at the port.
The authorities should have taken the initiative to unload the vessels at an earlier date since these materials could have been used during the emergency.
Importers will now have to pay fines as per international shipping rules as long as the vessels remain grounded, said Kabir, also the managing director of Crown Cement.
Besides, since the demand for food will go up on the occasion of Ramadan, which begins within a couple of days, these vessels will be required to carry essentials.
Under the circumstances, the government should cooperate with importers and secure the raw materials from the ships, the entrepreneur added.
There are 37 active cement factories in Bangladesh and more than Tk 30,000 crore has been invested in the industry.
Manufacturers have a combined annual production capacity of 58 million tonnes against the local demand of 33 million tonnes.
In the 1990s, Bangladesh used to import 95 per cent of its demand for the key construction material. However, the country’s cement requirement is now met entirely by the local industry, which has grown at a 15.6 per cent rate annually over the past decade.
Local companies dominate the market and annual sales have reached $3 billion, according to the BCMA.
Of the consumption, individuals account for 25 per cent, real estate companies and developers 30 per cent and the public sector 45 per cent.
The per capita consumption of cement is low in Bangladesh: it stands at 181 kilograms now and is expected to reach 220 kg by 2020.