Premier Cement to double production by January

Premier Cement Mills Ltd will start production in its new factory in January next year. This will help increase its daily production capacity to 16,000 tonnes from the current capacity of 8,000 tonnes.

At present its annual production capacity is 26 lakh tonnes, but this will rise to 55 lakh tonnes after the new factory starts production.

Kazi Md Shafiqur Rahman, company secretary of Premier Cement, told The Business Standard, "Our new plant will have a vertical rolling machine (VRM) using updated technology. We will start commercial production in January next year."

VRM technology allows higher quality cement to be produced at low cost and in a small space. It is also less harmful to the environment. Premier Cement made an agreement with Danish company FLSmidth & Co in 2017 to use this technology.

Presently, Shah Cement, Basundhara Cement and MI Cement use this technology.

Premier Cement spent Tk700 crore to establish this plant. Tk380 crore was taken as a loan from Standard Chartered Bank in the United Kingdom, and the remaining amount was taken from local banks.

National Cement, which is a sister concern of Premier Cement, holds a 15 percent ownership stake in Premier Cement.

In 2014, Premier Cement started a plant for the production of cement bags. This plant is capable of producing 26 lakh bags per year. After meeting its own needs, the company sells bag to other companies.

The company has 20 vessels, 54 bulk carriers, 90 trucks and 267 covered vans for transporting cement and raw material.

Premier Cement has its own subsidiary electric company with a production capacity of 5.34 megawatts to provide uninterrupted electricity to the cement factory.

The chairman of Premier Cement, Md Mustafa Haider, said, "We have invested a large amount in infrastructure development to decrease the cost of cement production and marketing. It will also help to keep the profit stable."

The company's sales increased 33 percent from 2013-14 to 2017-18. In the 2017-18 fiscal year, it sold cement worth Tk1,000 crore. In the first 9 months of the 2018-19 fiscal year, the sale was Tk890 crore. However, the production cost of cement has increased because the price of raw material is volatile, causing ups and downs in net profit.

The company started exporting on April 26, 2008, and exported cement worth Tk2.42 crore that year. In 2017-18, the company exported cement worth Tk49.46 crore. Their export has increased 20-fold in the last ten years.

The company secretary said, "Seven states of India are our largest export market", and added, "We have our own land and water transportation system to make the export business hassle free."

Premier Cement got listed in the share market in 2013 under the proprietorship of TK Group and GPS Group. That year, it sold its shares to investors for Tk22 with a premium of Tk12. The highest price of its share so far has been Tk103. Its share was traded at Tk62 in the Dhaka Stock Exchange on Thursday.

The present paid up capital of the company is Tk105.45 crore and reserve is Tk305 crore.

After being listed in the share market, the highest dividend paid by the company was 30 percent.

Kazi Shafiqur Rahman, the company secretary, said, "We have invested funds taken from the initial public offering, bank loans, and our own funds to expand our business. The reserve has been increased by providing less dividend."

However, shareholders will get something good in the future, he hoped.