Cahya Mata Sarawak defends its cement pricing

Cahya Mata Sarawak defends its cement pricing
06 July 2018

In response to a motion moved by Pujut Assembly man Ting Tiong Choon, Cahya Mata Sarawak Bhd (CMS) says that it is incorrect to say the company has a monopoly over the production and sale of cement in Sarawak, Malaysia.

CMS stated that contrary to the assertion made by Ting that since June 2016, one bag of 50kg cement is sold at MYR21.50 (US$5.32) in Sarawak, but at MYR17.30 (US$4.28) in Sabah, the true figure quoted by the Malaysian Department of Statistics is MYR20.37 for a 50kg bag of cement in Sabah and MYR21.14 for Sarawak - a difference of only MYR0.77 and not the difference of MYR4.20 stated by the assemblyman.

In a press statement, the company affirmed that it has not increased the price of cement in Sarawak since January 2016, choosing instead to absorb the rising costs of producing cement itself and to improve its operational efficiency, without passing the burden to the customer.

It also pointed out that it ensures that Sarawak's market remains open and thus competitive in that there are no restrictions on cement players setting up plants or importing cement so long as they comply with the usual rules and regulations.

"The comparatively modest higher prices in Sarawak over Sabah can be attributed to discretionary mark-ups by dealers and retailers in view of the higher costs of living in parts of the state (such as Miri)," the company said in a statement. "Prices in Sarawak cannot be expected to be the same due to the size of the state (124,451km2 vs 73,904km2 for Sabah), which exponentially increases the cost of logistics due to longer delivery distances and double handling," the company added.

CMS also pointed out that the limited size of the market means that it would not make financial sense for another player either to set up a plant or to develop a long-term importing business.

Published under Cement News