Malaysia cement industry fears further delays in 9MP projects

Malaysia cement industry fears further delays in 9MP projects
Published: 15 September 2008

The Cement & Concrete Association of Malaysia fears that projects under the Ninth Malaysian Plan (9MP) would be held back until the next Malaysian plan.

“The full impact of the implementation of the 9MP has yet to be felt and appears to be lagging behind. There is therefore the possibility of the 9MP projects being implemented during the 10MP,” said the association’s executive director Grace Okuda.

In an email interview with The Edge Financial Daily, she also expressed the industry’s concern that the 2009 Budget would have a “negligible”impact on the cement industry.

She noted that 2009 Budget had only focused on addressing the burden of the low- and medium-income groups to cope with the escalation in the cost of living following the price hikes in fuel and goods.

Okuda said the slowdown in construction activities might put further pressure on cement manufacturers.

“The continuing rising input costs, especially for coal and the recent hike in diesel and electricity tariff rates, is making it difficult for the industry to sustain its position,” she said.

Okuda said coal, diesel and electricity constituted almost half of cement’s production costs and would have a major impact on cement prices. “Because of the huge impact, manufacturers would have no choice but to pass some of these increases to consumers,” she said.

It has been reported that in order to offset the cost increases, Lafarge Malayan Cement Bhd, the largest cement producer in Malaysia, had twice raised its average cement selling prices in June (+17%) and August (+8%).