TDS Desk:

Major industrial sectors in the country, such as steel, cement, ceramics, and textiles, are dealing with severe challenges due to capital shortages, high dollar prices, and insufficient gas and electricity supplies. This has disrupted production in large factories and reduced demand for construction materials like steel and cement, particularly with large public and private construction projects halted.

Compared to the previous year, demand for steel and cement dropped significantly in the last quarter of 2024 (September to December). Reports reveal a 35% drop in cement demand and a 65–70% drop in steel demand. Manufacturers are attempting to sustain sales by reducing prices, but the efforts have not yielded substantial results.

Abdur Rahim, General Manager of Diamond Cement, remarked, “The demand for cement has significantly declined as both public and private construction projects remain stalled, resulting in reduced production in factories.”

Typically, January through March is the peak season for construction materials. However, despite planning production accordingly and importing raw materials, manufacturers are now struggling due to the drop in demand. Many factories have reduced production, and the opening of import letters of credit (LCs) has also declined.

Last year, steel prices during this period ranged between Tk105,000 and Tk107,000 per ton, whereas this year, they are selling for Tk85,000 to Tk90,000 per ton. Similarly, cement prices have dropped, with a 50 kg bag now costing Tk470–500, compared to Tk490–530 last year. Nearly all steel and cement factories are operating at half their production capacity.

Mohammad Sarwar Alam, Managing Director of HM Steel and Golden Ispat, explained, “Even during the peak season, manufacturers of steel, cement, and other construction materials are not seeing the expected sales. This is primarily due to stalled public and private construction projects.”

Bangladesh Bank’s latest report reveals that imports of capital machinery during the first five months of FY 2024–25 (July to November) decreased by 26% compared to the same period last year, while LC settlements fell by 22%. Moreover, private sector credit growth has hit a three-and-a-half-year low, exacerbating the challenges faced by large industries.

These combined issues have placed the industrial sector in a multifaceted crisis, raising concerns about its long-term stability and growth.