Cement sector suffers as duty increases

The cement industry, one of Bangladesh’s emerging sectors, is passing through a tough time due to additional duties on raw materials import, said the manufacturers.

President of Bangladesh Cement Manufacturers Association (BCMA) Md Alamgir Kabir spoke at a press conference in Dhaka on Monday.

“We, the cement manufacturers, have been demanding for a long time to cut custom duty on the major raw material of the cement clinker. We wanted it to be lowered to Tk 200 per tonne from Tk 500,” he said.

“But the government proposed a clinker duty of around 12-13 percent, which increased the duty on the major raw material to around Tk 700 per tonne.”

Md. Alamgir Kabir, who is also the Vice-Chairman of Crown Cement, termed the proposed duty as “uneven”, fearing that the proposal might put additional pressure on the consumers and lead to a slowdown in overall construction activity.

“We have been demanding for a long time that at the import stage, primarily AIT can be levied at a maximum of 0.50 percent, but it would not be appropriate to consider it as a final settlement,” he pointed.

“Therefore, we have been applying to open up the opportunity to adjust the AIT for key raw materials of cement.”

BCMA president also mentioned that a request was made to the National Board of Revenue (NBR) in a pre-budget discussion on February 16 to consider the matter.

He said the authorities verbally assured of reconsidering the issue of AIT.  “But unfortunately we have seen no reflection of this in the proposed budget.”

Md. Alamgir Kabir requested the government to adjust the duties for the survival of the industry.

He also said that the delay of issuing Letters of Credit (LCs) also posed a major challenge for the business owners in the cement sector while the load shedding interfered with production.

“In addition, there is a shortage of gas and electricity to ensure the continuity of production smoothly.”

He said, “The cost of transporting cement is also rising as a result of the rise in fuel oil prices. Besides, the absence of financial incentives for cement exports hurts the industry.”

“If the government designates this sector as a ‘priority sector’ and issues the necessary directives to the pertinent government agencies, including banks, then the distress of the cement producers will be eased.”

He said such an initiative could safeguard the country’s cement industry.

BCMA president said, “The cement industry is a developing manufacturing sector that replaces imports. This industry is significantly advancing national growth, including infrastructural development, in order to address the nation's housing crisis.”

“The country's revenue is significantly influenced by the cement industry, which also makes a unique contribution to the economy.”