Cement price hike plan sparks angry response, UAE

Cement price hike plan sparks angry response, UAE
Published: 10 July 2006

Contractors have launched a furious response to proposed increases in the cost of cement in the UAE. The UAE’s contractor association has vowed to fight for its members if cement prices are increased by US$2.70 (AED10) per tonne. Cement manufacturers and suppliers have been in negotiations with the Ministry of Economy for the past two months to see whether they can increase the price to US$87/t.

But if the 3.6 per cent rise is introduced, Humaid Salem, general manager, UAE Contractors’ Association, warned that he will fight to protect his 100-plus members as he did in 2004 when prices leapt 200 per cent. “Contractors have signed up for projects that last maybe two or three years, and any price increase will get them into trouble,” he told Construction Week.

SS Lootah Contracting said it could see no reason why producers and suppliers were calling for a price hike other than for short-term profit. “There is an upsurge in demand for cement in the UAE, being an essential building material, but there is no shortfall in supply like in 2004,” said Mohamed Fathi, technical manager.

Fathi called on the ministry to implement a mechanism to protect the interests of contractors. “Otherwise we will all suffer from the negative impact of unjustified and unplanned price hikes for essential building material,” he added.

Cement producers argue that the rising cost of raw material and fuel has hit production hard. “The last increase we had was in October 2005, but since then there’s been nothing,” said Balam Nair, sales supervisor, Union Cement Company, based in Dubai. “The price of raw materials and fuel has gone up and this has impacted on our production rates.”