Bhutan cement prices reach all-time high

Bhutan cement prices reach all-time high
Published: 29 April 2004

At Nu 3,025/t (US$68/t) locally produced cement has reached its highest prices ever according to the Penden cement authority limited (PCAL) in Gomtu, Samtse.

“This is the highest ever price in the history of PCAL,” said the joint managing director of the Nu 273m worth company, Dorji Norbu, which generated the second highest revenue in 2002-2003 after Chukha hydro-power corporation.

Dorji Norbu said that a scarcity of cement in the Indian market had hiked cement prices. “The benchmark of our price fluctuation is based on the prices in Siliguri and Guwahati and our price change is proportional to those in India.”

While the construction industry, already burdened by the hike in steel prices is finding it hard to cope with the hike, the local cement industry is enjoying the buoyancy. “It is profitable,” said Dorji Tshering, the chief manager of administration of Lhaki cement private limited (LCPL) at Gomtu.

Prices are however expected to fall after the Indian elections, which is in full swing today. “Besides in the cement business summer is the lean season for construction and prices dip because of lower demand,” said Jangchuk Tshindup, the deputy manager, commercial, of LCPL.

But the nature of demand for cement in Bhutan was unpredictable according Dorji Norbu even though estimates can be drawn on the demands trends in recent years. “We cannot predict the demand because of the fluctuations,” he said.

Today, 80 percent of Penden’s production is consumed by the domestic market and the rest goes to India. “Though we have a 100 percent market potential in India we first meet the demands within the country,” said Dorji Norbu. Lhaki cement, however exports about 70 percent of its production to the Indian states of Sikkim and Assam.