Builders still hard hit by costly cement

Builders still hard hit by costly cement
Published: 31 August 2004

Despite the government’s withdrawal of five per cent import duty on cement, traders are still cashing in on the scarcity in the local market, sources said.  The cement price ranges between Dh13 and Dh15 per bag in the market, depending on bulk purchase and payment terms. It is much lower than the peak price of Dh22 to Dh25 per bag, but higher than the pre-crisis level of Dh9.  Some suppliers are rationing cement, mostly to clients who pay cash. A number of contractors are importing cement directly from Egypt, India and some other markets.

"We waived customs duty on cement about three weeks ago under the directives of General Shaikh Mohammad Bin Rashid Al Maktoum, Crown Prince of Dubai and UAE Minister of Defence," a Dubai Customs spokesperson told Gulf News yesterday. "Since then, all cement is entering Dubai without the duty."  The impact of this, however, has not been felt in the market, contractors said.

"Though the cement price has come down in the market from its peak, we as users are not feeling the impact as most of our suppliers are still charging a high price. We are still paying a high price," said Manab K. Kundu, general manager of Al Naboudah Engineering Services.

"Apart from this, we are suffering with the increase in diesel prices as well as the high price of steel and transportation costs as most of our contracts are on a fixed price basis. So, the clients usually do not consider these factors. We have to absorb these, paying from our own pockets."  Riad Kamal, chairman of Arab Technical Construction Co (Arabtec), said: "Though the price of cement has come down a lot from its peak, we believe there is still room for reduction. The price could come down further. The market price is about Dh270 per tonne. I think it can come down to Dh200 to Dh220 per tonne."