The MI Cement Factory Ld (MICFL) in Bangladesh informed the Dhaka Stock Exchange (DSE) on 11 October that the Board of Directors of the company, have approved the postponement of setting up the sixth cement unit in central Bangladesh. They cited as reason the severe negative impact of COVID-19 on the Bangladeshi cement industry.
Earlier in January 2019, the company announced its plan to expand its daily production capacity by 76 per cent to 19,400t with the introduction of the sixth manufacturing unit at its factory in Munshiganj.
While submitting reasons for delaying the project, the officials said that both the technical and commercial negotiations with the international contractors were suspended with the outbreak of COVID-19 as well as the financing arrangement for the project. Cement demand is expected to remain tepid in the next 2-3 years until the economy rebounds and therefore existing capacity is expected to be able to cover cement demand over this period, according to the company’s Board.
In addition, the company has cancelled its plan to transfer three oceangoing vessels by establishing three separate wholly-owned subsidiary companies for commercial operations. Therefore, the three vessels will remain the asset of MICFL. The approval process of the transfer of the mother vessels requires the approval of various overseas offices. With the outbreak of worldwide COVID- 19 pandemic, all the international offices stopped working, with the result that the transfer formalities could not be completed.
MI Cement Factory has reported earning of sales revenue of BDT11.44bn (US$134.9m) during the period of July 2019-31 March 2020, against BDT10.97bn in the equivalent period of the previous financial year. But the cost of sales increased to BDT10.18bn from BDT9.67bn during this period. It incurred a loss in net profit of BDT237m opposed the profit of BDT158m in the same period last year.
Published under Cement News