No hike in cement price

This article first appeared in The Edge Financial Daily, on June 20, 2019.
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PUTRAJAYA: Cement manufacturers, who sent the notice on price increase to construction companies last Sunday, decided to reverse the decision on the 40% price hike.

Domestic Trade and Consumer Affairs Minister Datuk Seri Saifuddin Nasution Ismail told the media that the decision was reached at a meeting on Tuesday, in which cement makers were reminded to duly discuss with the government any future price hike since cement is a price-controlled item.

“They (cement makers) stated several grounds to justify an increase in cement price due to costlier imported materials used in making the cement because of the weak ringgit.

“However, following yesterday’s meeting, they agreed to not increase cement prices,” the minister told a media conference after launching guidelines on vehicle window tinting yesterday.

Cement is a controlled item and action under the Control Of Supplies Act could be taken against industry players found to increase the price without the government’s approval, Saifuddin was quoted by Bernama as saying.

The Cement and Concrete Association of Malaysia on Monday defended the price hike, pointing out the cement manufacturing industry has been suffering from cost increases, such as higher electricity tariff over the past few years following the withdrawal of the special industrial tariff, and the implementation of the imbalance cost pass through mechanism.

The association also highlighted that packing materials have become costlier following the increase in pulp prices, while imported fuel materials, engineering spares as well as equipment have further compounded the problem of rising costs.

However, cement makers’ announcement on the price hike was met with strong complaints from its end-users, such as property developers and construction companies.

Construction Industry Development Board chief executive officer Datuk Ahmad Asri Abdul Hamid forewarned that the proposed 40% hike in cement prices might lift building costs by 7% to 8%, based on simulations run by the board. — Bernama