Crown Cement PLC (formerly MI Cement Factory Ltd) has announced the commencement of construction work on its sixth line at the existing factory premises at West Mukterpur, Munshiganj, Bangladesh, with a capacity of 8000tpd to increase the overall capacity of the company from 11,000tpd to 19,000tpd. The investment amounts to BDT7.07bn (US$8.6m), according to the latest annual report 2021-22, released last week. No timeframe for the new line’s completion was reported.
Chairman of the company, Mohammed Jahangir Alam, while reviewing the past fiscal year 2021-22 performance, stated that despite a lot of pressure from external forces beyond its control, they achieved market share growth in the cement industries. The company revenue increased from BDT16.315bn in 2021 (June – July) to BDT19.139bn, up by BDT2.824bn or 17.31 per cent YoY, but due to extreme increases in the price of raw materials, increases in the exchange rate of US dollar, rises in transportation cost, increases in fuel cost, unstable supply of electricity, imposition of advance tax and many other reasons, the company couldn’t achieve its targeted success. It reported a loss of BDT229m from last year’s profit of BDT859m.
In 2021-2022, the general and administrative expenses increased by 13.42 per cent. On the other hand, marketing, selling, and distribution expenses have decreased by 7.54 per cent. Finance cost increased by 39.21 per cent to BDT220.11m due to foreign currency exchange loss. The company produced 2.948Mt of cement in 2021-22 and saw a capacity growth from 82 per cent to 89 per cent during this period.
Overcapacity related risk
Overcapacity in the industry is a matter of concern as it can significantly intensify competition and price confrontation among cement companies. Crown Cement is well aware of this risk as it strives to explore new locations to export cement. At the same time, Crown Cement is leveraging its deep understanding of the market and its strong brand equity backed by its high-class sales and marketing workforce to improve its sales.
Published under Cement News