This article first appeared in The Edge Financial Daily on June 18, 2019

KUALA LUMPUR: The Johor Master Builders Association (JMBA) yesterday warned of an imminent 50% hike in cement prices, which would affect home prices.

The association’s president Tee See Kim said JMBA members recently received notices from four cement manufacturers that cement price will increase within one to two weeks.

“The price of cement, which is one of the most important materials in a construction project, is expected to increase a hefty 50%. This unexpected price hike will cause contractors to suffer heavy losses.

“JMBA feels the local construction industry is still experiencing a downturn and the country’s cement supply exceeds demand. There is still a surplus of cement in the market, [but] the price hike is happening sooner than expected. It is not inconsistent with the principle of supply and demand,” he said.

Tee said JMBA understood that some cement manufacturers have started closing production lines, citing maintenance, therefore creating a supply shortage.

“JMBA urged cement manufacturers to take into account our long-term partnership and continue to work together with us, and not burden us with a sudden exorbitant price hike.

“Any price increases should be gradual, giving us at least a three-month advance notice. JMBA also wants cement manufacturers to ensure a stable supply and to not create any shortage in the market which may jeopardise the industry,” he said.

Meanwhile, Tee said JMBA would appeal to the relevant authorities to look into this matter and monitor the situation closely.

“JMBA has also appealed to the government to look into the sudden price hike; could it be linked to the recent mergers and takeovers of cement manufacturers in the country? This scenario will stifle competition and encourage monopoly and price control — unhealthy for our economy.

“Our government initiatives to promote affordable home ownership while urging developers to reduce home prices will be jeopardised by this price hike as well. Ultimately, the people will bear the full brunt of the increase,” he said.