Steel and cement producers post higher profits as sales skyrocket


A worker puts the finishing touches while packing products in a warehouse of steel manufacturer GPH Ispat in Chattogram. Most of the listed stem growers in Bangladesh posted higher profits from July to September thanks to higher sales. The photo was taken two weeks ago. Photo: Rajib Raihan

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A worker puts the finishing touches while packing products in a warehouse of steel manufacturer GPH Ispat in Chattogram. Most of the listed stem growers in Bangladesh posted higher profits from July to September thanks to higher sales. The photo was taken two weeks ago. Photo: Rajib Raihan

Most of the listed bar and cement producers in Bangladesh posted higher profits from July to September thanks to higher sales as economic activities picked up thanks to the improving coronavirus situation.

Of the five steelmakers listed on the Dhaka Stock Exchange (DSE), three made financial statements for the quarter, all reporting a massive increase in their profits.

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Profits for BSRM Steel and BSRM Ltd more than tripled from July to September, year over year.

Tapan Sengupta, deputy general manager of BSRM Ltd, attributed lower production costs due to efficiency gains, increased sales volume and efficient distribution channel for higher profit margin.

The earnings per share (EPS) of BSRM Ltd, Bangladesh’s largest steelmaker, climbed 202% to Tk 4.29, while that of BSRM Steel jumped 204% to Tk 2.89, according to data from the DSE.

GPH Ispat’s EPS climbed 63 percent to Tk 1.13.

“We had a stock of raw materials. As a result, the company recorded better profits,” said Kamrul Islam, executive director of finance and business development for the steelmaker.

Globally, the price of smelting scrap, the raw material for steel products, rose to $ 630 per tonne recently, from $ 300 to $ 350 per tonne last October.

Cost control and efficiency also paved the way for better profit gains. GPH Ispat boosted production, boosting sales, he said.

Due to higher input costs and unprecedented ocean freight rates, the price of 60 grade rod in Bangladesh has reached a record high of 81,500 Tk per tonne, according to data from the Trading Corporation of Bangladesh, managed by the state.

Of seven listed cement companies, six disclosed their financial reports for the quarter. Two producers reported higher profits while they declined for two companies.

Mohammed Amirul Haque, chief executive of Premier Cement, said most cement manufacturers made a profit in the last quarter as sales volume increased from the previous quarter.

However, the sales volume has not yet reached the pre-pandemic level, he said.

Haque says the millers used raw materials purchased before the last price hike in the world market due to supply shortages, high shipping costs and supply constraints.

He warns that the price of cement would increase further as the price of raw materials continuously increases in the international market.

“Then the manufacturers will have no other way but to adjust the price.”

The EPS of LafargeHolcim Bangladesh, a multinational company, increased 44 percent to 0.81 Tk. Crown Cement, a local company, reported higher profits.

Premier Cement’s EPS fell 85 percent to Tk 0.12 in July-September. Confidence Cement also saw its profits decline.

Meghna Cement’s profit remained the same, while Heidelberg Cement continued to suffer losses.

Rajesh Surana, CEO of LafargeHolcim Bangladesh, said his company had another exceptional quarter supported by tight cost control and efficiency improvements.

He attributed the strengthening of the digital footprint, the optimization of market reach by getting closer to end customers, the relaunch of Supercrete, one of its flagship brands, and the implementation of profitability programs without loophole for solid results.

“In addition, our new product launches are very successful.

Supported by constant economic development, rapid urbanization, public infrastructure projects and the growth of the real estate sector, Bangladesh’s cement industry has grown by 11.5% per year over the past decade.

There are 37 active cement plants in the country with a combined annual production capacity of 58 million tonnes against a demand of 33 million tonnes.

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