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LafargeHolcim reported record sales and profit for 2023, backed by what the multinational cement maker said is diverse product portfolio and innovative building material solutions.
The company's sales grew 20 per cent year-on-year to Tk 28.39 billion last year while profit jumped 34 per cent to Tk 5.94 billion in 2023, compared to the previous year, it said in a statement on Thursday.
"The performance demonstrates the strength of our diverse product portfolio and strategic presence driven by innovative products, high-value solutions, digital footprint, and new channels," Iqbal Chowdhury, chief executive officer of LafargeHolcim, was quotes as saying in the statement.
Operational excellence and cost optimization also helped the company achieve a remarkable performance, said Mr Chowdhury.
LafargeHolcim's commitment to making international standard cement available in local markets and excellent market responses to new brands, such as Supercrete Plus, Holcim Shokti, and Holcim Water Protect, played an encouraging role in the financial results.
Digital applications and e-commerce platforms boosted the company's efficiency in marketing.
The company's earnings before interest and taxes (EBIT) stood at Tk 7.76 billion in 2023, a whopping 30 per cent increase from a year before, despite challenging market conditions.
Based on the remarkable profit growth, the board of directors declared a 50 per cent cash dividend (Tk 5 per share) for 2023, highest in its history since 2003 listing in the stock market.
"This remarkable dividend payout reflects the company's unwavering confidence in its long-term sustainability."
The head of the company said it would continue focusing on expansion of channels and product portfolio and improve digital footprint to ensure a sustainable growth.
"We are also at the forefront of de-carbonising building across its entire lifecycle to build a net-zero future that works for people and the planet, while delivering solid performance at the same time."
Geocycle continued to offer long-term solutions to the country's waste management challenges, the CEO said. Approximately 50,000 tonnes of diverse waste streams were safely disposed of during the year, clearly accelerating the green growth agenda of the company, according to Mr Chowdhury.
"Our journey for cost leadership remained as a focal point during the year and had a very positive impact on the overall result."
The 2024 will be challenging due to geopolitical uncertainty, ongoing inflation, and stubborn foreign exchange crisis, he said.
"Despite that, we are optimistic and well poised to deliver strong performance, as we demonstrated in the previous years," Mr Chowdhury said.
Industry insiders say LafargeHolcim has a unique edge in business as it depends on its own source of core raw material - limestone, which is transported from mines in Meghalaya to its factory in Chhatak, Sylhet by a conveyor belt.
This advantage creates an opportunity for the company to avoid freight charges and escape international raw material market volatility, two major factors that shrink the profitability of its competitors.
LafargeHolcim also started producing aggregates in its Chhatak plant in January 2021. The profitable business also contributed to the company's revenue growth.
Some other cement makers started to rebound in the recent quarters as the prices of raw materials started cooling down in the global market while the selling prices of cement at the retail market rose about 10 to 15 per cent during the year.
Five of the seven listed cement manufacturers improved their earnings in the July-September quarter of FY24, overcoming challenges stemming from rising energy costs as well as the depreciation of the taka against the dollar.
The cement makers managed to offset additional costs partially by boosting sales prices and taking advantage of the recent reduction in raw materials' prices in the global market.
Crown Cement, Heidelberg Cement, and Premier Cement rebounded in the first quarter of FY24 from losses endured in the same quarter a year ago.
LafargeHolcim is a member of Holcim Group based in Switzerland. Cementos Molins of Spain has been operating it in Bangladesh for almost two decades.
There are 37 active cement factories in Bangladesh and more than Tk 350 billion has been invested in the industry, according to Bangladesh Cement Manufacturers Association (BCMA).
The industry's combined production capacity is more than 83 million tonnes while the local demand is about 47 million tonnes as of 2023.