In the UAE, cement producers have hiked prices by 15% - an increase attributed to the rising cost of energy and fuel. Prices are now between Dh200 and Dh250/t, up by about Dh30/t.
The price hike will leave contractors struggling in an already subdued environment. A few years ago, the country was experiencing a building boom, during which time cement prices were as high as Dh420/t. However, many construction projects were cancelled or put on hold during the global economic downturn.
Cement manufacturers notified its customers of the price increases last week, but contractors are complaining that insufficient notice was given. The price of their contracts is already set, and it is difficult to go back to their clients with a revised figure. Instead, it is likely that the price increases will be passed on to the next customer.
Though the UAE Ministry of Economy has stepped in to cap prices in the past, current prices haven’t yet reached that level. Last year cement producers reported significant losses, with revenue down almost 30% y/y for the first nine months according to figures from Global Investment House. RAK Cement posted a Dh1.2 million loss for the first 6 months of 2010, while Union Cement posted a Dh9.8 million loss in the same period.
Read the article online at: https://www.worldcement.com/africa-middle-east/02022011/cement_producers_hike_prices_in_uae/