Cement manufacturers in the UAE will not be allowed to raise the minimum price of loose cement to AEDD220 per tonne and the government will resist any attempt by local factories to fix prices and form trade cartels, a senior official has said.
Speaking to Emirates Business, Mohammed Abdulaziz Al Shihhi, Director-General of Ministry of Economy (MoE), said: "We in the ministry realise that cement factories are demanding an increase in prices so they can reduce their losses, especially after the recent remarkable fall in prices. But we will not allow them to create a monopoly bloc that fixes the price to their advantage.
"The producers are not allowed to agree on a price unilaterally, without approval from the ministry and the Contractors’ Asso-ciation. The MoE is trying to maintain a free market wherein cement prices are determined according to market forces. Local producers will not succeed in fixing a certain limit for prices because the market is open for imported cement. We should encourage competition.
" This comes close on the heels of news that top cement factories in the UAE recently agreed to sell a tonne of cement for a minimum of AED220 – an increase of AED40 to AED70 over current prices. The prevailing market prices range between AED150 and AED180 per tonne. However, sources said that not all cement companies had agreed to this.
Ahmed Al Amash, General Manager of Gulf Cement Company and head of the UAE Cement Manufacturers’ Association, said: "Local producers have no option but to fix the price of loose cement at AED220 per tonne to limit losses. The industry is suffering from high energy, fuel, raw material and labour costs and is collapsing on the back of the large fall in prices. The MoE should move to protect it. The decision taken by the factories is not intended to increase prices. It seeks, rather, to stop a collapse in prices."