Malaysian construction wants lead time for price increases

Malaysian construction wants lead time for price increases
Published: 01 December 2008

The Master Builders Association Malaysia has requested cement and steel bars manufacturers to provide at least 6 months’ lead time for any announcement on price increase, according to local press reports.

Mr Ng Kee Leen president of MBAM said in a statement that this would enable the contractors to allocate provisions to mitigate their cost. He said that "As it is, contractors are facing difficulty in controlling cost of projects and committing to timely delivery of projects and the cement price increase will add more pressure to cash flow problems faced by contractors."

According to MBAM, many medium and small sized contractors from Class D, E and F may be forced to stop work, delay the works or even abandon the projects undertaken as a result of the steep essential building materials price hike, especially for steel bars and cement.

Mr Ng said although with liberalization, the cement price has continued to rise and it would be another increase in the space of 2 months which is an added burden to contractors. He added that "The same thing happening to steel bars. Prices have gone up to an all time high of MYR 4,100 per tonne. In the case of steel bars although it was liberalized on May 12th 2008, the liberalization process was not well implemented."