HOLCIM Cement is bullish about the multinational firm's prospects in the country thanks to the ongoing high-profile infrastructure projects, which will pave the way for more growth, its two high officials said.
In preparation, the company recently invested Tk 300 crore to expand its production capacity to 20 lakh tonnes a year.
“We see only opportunities here. We do not see any barrier, or else we would not have invested a further Tk 300 crore,” Aidan Lynam, head of Holcim Group's South Asia operations, told The Daily Star in an interview.
The political instability, which brought the country down to its knees, is not a big issue to the Swiss company either.
“Bangladesh is not the only country that is seeing political ups and downs. It is not an unusual thing to be scared of it, but we do not see it as a big issue—not here in Bangladesh or anywhere else.”
While the government has been facilitating the investment climate, he said it could do well by better enforcing the laws and regulations.
Asked whether the construction of Padma bridge will open business opportunities for Holcim, Rajnish Kapur, managing director of Holcim Cement (Bangladesh), said it is not just the Padma bridge, there are a number of infrastructure projects taking place, all of which are “the drivers of growth in a country”.
He said the cement manufacturer does not want to fixate on the bridge's construction. “What will happen to us once the bridge is made?”
Kapur instead is focusing on the growth opportunities that will present itself once the bridge is up and running. “The Padma bridge is going to connect and develop that part of the country -- it will be some growth engine.”
Holcim is “very actively looking to participate” in the monumental bridge's construction process. “We are in discussions with designers and consultants. We are prepared to bring in our best quality cements, which will meet all requirements,” Kapur added.
Quality is one aspect that the company places great emphasis on. “Volume and size is not everything. For us quality is everything,” said Lynam.
The Holcim regional head, who was in Dhaka on June 24, said the company is happy being number 5 or 6 in terms of volume and returns in Bangladesh, where the cement industry registers 8 percent annual growth.
“We are not obsessed with market share. What we are obsessed with is satisfying our customers with quality of products and services.”
Fortunately for Holcim, the customers here are looking for reliability and consistency and players who can deliver in a consistent manner, he said. “Our prospects are very good in the market, in that sense.”
“Stick to your quality, code of conduct and compliance and be a long-term partner in the country where you operate. Take the normal path and be consistent and clear and transparent -- and you will get results.”
About the merger plan between Holcim and its direct competitor Lafarge, Lynam said it would be too early to draw a conclusion on the issue.
There is an intention to merge, which is conditional on regulatory approval in parts of world and this process is underway, he said.
“But it will be a very positive experience if it happens. Both the companies align in terms of values and mindsets. Economically, it will be a very positive thing, especially for the customers,” Lynam said.
Founded in 1912, Holcim today has operations in more than 70 countries and is the market leader in cement production in India, Australia, Azerbaijan, Slovakia, Switzerland and Latin America.
Holcim Bangladesh began its journey in September 2000 through acquisition of Hyundai Cement Bangladesh. Gradually, Holcim solidified its interest in the country by acquiring two more plants: United Cement Industries at Meghnaghat and Saiham Cement Industries at Mongla.
The annual demand for cement in Bangladesh is around 1.8 crore tonnes a year, while the production capacity of the active manufacturers combined is around 3.5 crore tonnes, almost double the local demand.