Govt told: 3-year wait for cement unfair

Govt told: 3-year wait for cement unfair
14 September 2007

The State Government has been urged to allow the free market importation of cement while the proposed clinker and grinding plants are up and running.

Consumer Association of Sabah and Labuan (Cash) President Datuk Patrick Sindu said the construction industry simply cannot afford to wait three years for the plants to be ready before the situation could stabilise.

He said the monopoly of the cement-producing industry in Sabah by Cement Industries Sabah (CIS), that is believed run by mostly political appointees, is hurting the economy as well as the construction sector.

"We live in a borderless world and thus the market should be prepared to embrace the borderless concept if we are to improve the current situation," he said.

He was commenting on Industrial Development Ministry’s Permanent Secretary, Ismail Abdullah’s announcement that the State Government has approved the setting up the said plants to enable Sabah to be self-sufficient in cement supply.

Ismail had said the plant to produce clinker, the main raw material for cement, would be built near the present Cement Industry Sabah (CIS) plant in Sepanggar Bay, and is expected to be completed in three years.

However, Patrick said the Government should not drag its feet over the matter because inevitably it is the consumers who will suffer.

"The low cost housing or People’s Housing Programme (PPR) needs cement and other building materials. If there is a hiccup in the supply chain, surely the construction of these homes would also be affected," he stressed.

Hence, the best way to immediately address the perennial problem is to open up the market.

The CIS plant in Sepanggar has a grinding capacity of about 780,000 metric tonnes and it is also importing 360,000 metric tonnes in bags and bulk to meet the demand of 1.14 million metric tonnes of cement for this year.

From January to August, CIS had already supplied to the market a total of 725,000 metric tonnes.

The monthly demand in Sabah is about 100,000mt and CIS has geared to meet the requirement of about 400,000mt expected until end of this year.

CIS Executive Officer Datuk Aslie Awang Hashim blamed the shortage on external factors such as the weather that resulted in the shipment of the raw material being delayed.

"It may not be raining here but we don’t know what the weather is like at the loading point in Taiwan or the Philippines where we are getting our supply," he said.

Furthermore, he said panic-buying among major contractors in June also resulted in many small-time contractors facing problems in getting supply despite sufficient supply being given to distributors in the State.

Towards this end, Aslie said CIS is bringing in about 60,000 bags of cement that are expected to arrive sometime next week for the East Coast.

Currently, he said about 2,600 tonnes were being supplied to the West Coast market daily.

Meanwhile, the MCA Sepanggar division also thinks the State Government should consider opening up the market since CIS is unable to cope.

Its Youth chief, Wilfred Yong, said the government must take immediate action to resolve the acute shortage of cement the State is facing.

"If the shortage is not resolved, the implementation of the Ninth Malaysia Plan cannot be efficiently carried out," he said, adding that he received many complaints from contractors and developers that the shortage was adversely affecting them.

He said one of the consequences of the perennial problem on contractors is that they have to pay the penalty for delays in completing their projects.

"Inevitably, the situation has created an unjust misery for them."

Yong foresees the coming Hari Raya celebration and other festive celebrations worsening the scenario since many people would be renovating their houses.

"The shortage of cement will have a domino effect on the nation’s economy.

"Therefore, this problem should not be taken lightly as it will affect the sale of other construction materials like steel and sand, among others," he said.

According to him, some of major construction projects had stopped due to the shortage and envisioned the repercussions would be severe.

Yong said the country would not be able to move forward and attain Vision 2020 if basic items necessary for development are lacking.

Published under Cement News