Moscow city Government calculates losses from Eurocement

Moscow city authorities estimate the construction sector’s losses from hikes in the Eurocement group’s prices at R1.0bn. The sector uses 1.2Mt of cement on average in social housing construction yearly. Eurocement has become Russia’s leading cement maker after taking over INTEKO’s cement production assets. As soon as the deals were closed, cement prices jumped by 70%. The city government admits that the price hikes may take a toll on implementation of city construction programs and development of an affordable housing market in Moscow. Municipal housing construction costs are expected to rise from roughly R23,000/square metre this year to R28,000 in 2006. Meanwhile, cement producers warn of further hikes in cement prices.