Stock prices of cement sector companies mark upward rise

FE Report

Stock prices of cement sector companies in the country's stock market in recent days marked an upward rise on the back of government plans to embark on some big civil engineering projects in Bangladesh, including the Padma Bridge.

As a result of upward trend in the cement sector issues, the contribution of the sector on the Dhaka Stock Exchange (DSE)'s total market capitalisation rose to 3.87 per cent Sunday from 3.75 per cent of October 22 last.

Presently there are 30 operational cement companies that can produce around 20 million tonnes of cement a year against a demand for 8.5 million tonnes.

Of them, Heidelberg Cement, Lafarge Surma Cement Confidence Cement, Meghna Cement, Niloy Cement, Aramit Cement, Padma Cement and Modern Cement are listed on the stock exchanges.

The eight listed cement companies now have a total of 115,791,374 shares in the market.

According to the Chiittagong Stock Exchange's latest sector-wise index, the cement sector gained 12.84 points to close at 3198.97 points Sunday against 3186.12 of Thursday last.

Some of the listed cement companies are expanding their production capacity due to consistent consumption and export growth.

"Cement consumption in Bangladesh is expected to witness growth of 13 percent in 2009, rising from 8 percent last year," an industry survey said.

An official of Bangladesh Cement Manufacturing Association, said though cement consumption is growing, local manufacturers have to keep a large portion of their factories idle, as "local factories will be able to produce in full swing when those public construction works begin".

During construction of Bangabandhu Bridge, the government offered duty free facilities to the constructing firm to import machinery and raw materials for cement.

Bangladesh exports around 12,000-14,000 tonnes of cement a month, mainly to India.

"Local cement makers see bright prospects for the days to come as the construction industry is set to see huge demand of the item," a market observer said.