HeidelbergCement AG told its customers in a letter that it will introduce a new pricing system from April 2004, which will split Germany into 5 regional price bands, Frankfurter Allgemeine Zeitung reported, citing the letter. The five regions, north, south, west, middle and east, reflect different supply and competition situations, the letter said. The paper said the pricing system will allow discounts for large orders and long term business relationships.
The paper said in the southern region, which consists mostly of Bavaria and Baden-Wuerttemberg, one ton of cement costs an average of Euro 80/t . The average price at the end of the year was around Euro 40/t and lower than HeidelbergCement's own costs. HeidelbergCement chairman Hans Bauer said in November that a "sensible price level" would be at least Euro 60/t. The company then raised prices, starting with a Euro 7.50 price increase, with plans to raise prices by a further Euro 12.50/t at the beginning of this year.