Premier Cement Mills plans to double its production capacity with an approximate investment of Tk 400 crore to meet the growing demand for the construction material.
The company's current production capacity is 6,000 tonnes a day, which will be increased to 16,000 tonnes through the expansion plan approved yesterday at a board meeting.
The cement industry is growing by around 22.5 percent a year, mainly driven by infrastructure development, said Md Shafiqul Islam Talukder, chief financial officer of Premier Cement.
“So, we want to increase our production volume as well as the market share.”
The expansion, which will be completed by 2018, will also help the listed cement manufacturer to make more revenue and profit, he said.
Of the expected investment of Tk 400 crore, Tk 209 crore will be used for machinery and equipment import and the remaining Tk 191 crore for construction and other local purposes.
Commercial production at the extended unit can be started soon after the completion of the expansion by 2018, Talukder said.
With 30 cement manufacturers around, the country has an installed production capacity of 3.5 crore tonnes a year at present against the local demand of around two crore tonnes.
Although local production is enough to meet the current demand, the country's per capita cement consumption is only around 105 kilograms, which is 215kg in India, 310kg in Sri Lanka, 170kg in Pakistan, 320kg in Malaysia and 1,700kg in China.
Premier Cement traded between Tk 89.8 and Tk 91.5 per share on the Dhaka Stock Exchange yesterday before closing at Tk 91.
The company's net profit stood at Tk 40.39 crore at the end of 2015 and basic earnings per share Tk 3.83, down from Tk 50.41 crore and Tk 4.78 respectively a year earlier.
Sponsors own an 86.08 percent stake in Premier Cement, institutional investors 6.66 percent, foreign investors 0.03 percent and the general public 7.23 percent.
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