Irish Cement considers price increases

Irish Cement considers price increases
Published: 22 September 2008

Irish Cement, a subsidiary of construction materials group CRH, is considering increasing the price of cement by as much as 18 per cent despite a fall-off in cement sales due to the construction slowdown.

The move has enraged some players in the domestic construction industry already suffering from the falling price of houses and the impact of the credit crunch.

Seamus Lynch, managing director of Irish Cement, last month wrote to customers warning that current indications were that it would be announcing price increases of between EUR15 and EUR18 per tonne. Given that cement currently sells at about EUR100 a tonne, the increase is seen as substantial.

Lynch indicated that he would be writing to his customers again in October to inform them of the exact price details for 2009.

In the letter, Lynch said the prices rises were due to ‘‘unprecedented increases in its operating costs due to massive rises in the price of energy, both in electricity supply and kiln fuels’’

Lynch expected to incur a 40 per cent electricity price increase when the company’ electricity contracts were renewed in November.

He also expected that, because of increased world coal demand, the price of kiln fuel would rise by 40 per cent next year.

Irish Cement recently increased capacity at its Platin Cement Works near Drogheda, a EUR200m project planned at the height of the property boom when demand for cement was soaring.

A spokesman for Irish Cement said that the company was faced with ‘‘significant cost increases’’ but that it did not yet know ‘‘how it will affect product pricing’’