Cemex bullish on Colombia – price fixing claims denied
The Colombian unit of Mexico’s Cemex expects Colombian demand for cement from all suppliers this year to reach 8Mt, the record set 10 years ago, propelled by a construction boom, a top company official said on Friday. In order to keep pace, the company will invest US$20 million in Colombia this year -- double the average of the last decade, Juan Carlos Delrieu, vice president of planning and finances at Cemex Colombia, told Reuters.
"If things go as we expect this year, and there is no reason to think they will not, Colombia will easily reach eight million tonnes” Delrieu said in an interview in his Bogota office. "We are very optimistic." Colombian cement demand was last about eight million tonnes in 1995 and 1996, before the country slid into recession at the end of the decade.
Colombia’s gross domestic product should expand by 4.5-5.0 per cent in 2006, according to the central bank, compared to estimated growth of about 5 per cent in 2005. President Alvaro Uribe’s crackdown on Marxist rebels has improved investor sentiment and helped drive the expansion along with low interest rates and recovering household consumption, economists say. "We are thinking that growth in the construction sector could reach at least 10 per cent this year," Delrieu said.
The government said on Thursday it will investigate the three suppliers to the country’s cement market, including Cemex, to determine whether they were secretly fixing prices. Delrieu denied any improper practices on the part of the company. Some Colombian officials have suggested price limits for cement in the Andean country. Delrieu said such a policy would be "disturbing."
Faced with rumors that the Colombian Government had reached an agreement with producers in order to cut prices, Mexico’s cement maker Cemex denied to have even been called to an agreement. ”Cemex wasn’t called nor participated in any agreement with Government officials”, Cemex Colombia Finance and Planning Vice President, Juan Carlos del Río said. Published under Cement News
