CMS Cement Sdn Bhd, a subsidiary of Cahya Mata Sarawak Bhd, announced that it will adjust its cement prices upwards by an average of 4.6% effective Jan 1, 2016, due to the depreciation of the ringgit.
In a statement issued on Tuesday, CMS said it will increase the prices to maintain the quality of its cement manufacturing and supply businesses, among others.
It added that the sustained depreciation of the ringgit since January 2015 had created an unprecedented increase in the cost of cement production, as over 60% of the key raw materials used to make cement namely clinker and gypsum are bought in US dollars.
In addition, the equipment and spare parts for machinery and all shipping costs are paid for in US dollars.
As at mid-November 2015, the ringgit recorded a 24.8% year-to-date loss, and a 30.9% deprecation over the same period last year.
CMS said the steep decline resulted in major increases in raw material prices since early 2015.
“Our commitment is to the state’s growth and in order for us to achieve this vision, tough but essential measures need to be implemented. At group level, we have absorbed the significant impact of the unfavourable foreign exchange rate since the beginning of the year. Various strategic measures have been implemented to control our production costs, however the increase in costs due to the major decline in the Ringgit has seriously impacted the cement division and the group’s profitability. If continued, this will not allow us to fulfil our long term commitment to the growth of the state,” said Cahya Mata Sarawak group managing director Datuk Richard Curtis.
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