MALAYSIA: CMS Cement to raise cement prices by 4.6% on average

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.

MALASYA: CMS Cement quash talks of manipulation, monopolisation

CMS Cement Sdn Bhd has quashed talks that cement makers in the country are manipulating the production and distribution of cement and of monopolisation and artificial shortages.

The sole cement maker in Sarawak said in the past week, the cement industry has generated much conversation with speculation that local cement companies would be increasing their prices.

"Within hours of the initial reports of the price hike, CMS Cement had released a response categorically stating that we would not be increasing our prices," said CMS Cement CEO, executive director and head of cement division, Othman Abdul Rani, in a statement today.

"CMS Cement has always remained committed to the socio-economic growth of the state and to facilitate this, we will not be increasing our prices," he added.

He said the company has a capacity to produce 5,500 metric tonnes per day and it distributes 5,300 metric tonnes per day as per demand.

"Generally this output changes if external factors interrupt the production as was the case a few weeks ago when delivery of raw materials from Vietnam and Thailand was delayed due to bad weather. But even in that instance, CMS Cement has been importing cement to relieve the constraints."

Othman also dismissed claims of monopolisation, saying Sarawak, in particular, has "no restrictions and anyone can enter the market and produce, manufacture or import cement".

He said the company is currently looking to engage with third party dealers, downstream product users and business associations.

"By engaging with these three key stakeholder groups, we hope to champion open advocacy, foster closer working relations and provide a clear roadmap to drive Sarawak to reach the state's full potential. It is our belief that we must all work together. CMS Cement offers in all three engagement instances to act as secretariat and facilitator, bringing parties together and moving in one unified direction," he added.

MALASYA: Lafarge confirms cement price hike

Lafarge Malayan Cement Bhd will raise the price of its cement from Aug 1, after taking into consideration rising costs of manufacturing and delivery of the building material, its executive director Chen Theng Aik said.

"The decision was made unilaterally and taking into consideration our increasing costs associated with manufacture and delivery of cement, which we have endeavoured to absorb over the years," Chen told SunBiz yesterday.

He dismissed claims that cement companies are colluding and creating an artificial shortage.

"Our plants had carried out major shutdowns for scheduled maintenance between February and June this year, which resulted in lower production during the first half of this year. We strongly refute the allegation of creating any artificial shortage of cement," said Chen.

Lafarge Malaysia's announcement follows claims by property developers, building materials distributors and builders last week that cement prices will be increased from Aug 1 by RM1 per bag of 50kg from RM16.75 to RM17.75 or RM20 per metric tonne from RM320 to RM340.

They warned that a price hike would increase construction costs which in turn would lead to higher property prices, as they pass on the additional costs to homebuyers.

However, CMS Cement Sdn Bhd, Sarawak's sole cement producer, had on Saturday said it had no intention of raising the price of the material.

There are six cement players in the country, the others being YTL Cement Bhd, Tasek Corp Bhd, Cement Industries of Malaysia Bhd (CIMA Group) and Holcim (Malaysia) Sdn Bhd.

MALAYSIA: Cement short: Sibu worried despite arrival of 2,000 tonnes from Kuching

SIBU: The shortage of cement for the construction industry is expected to remain, despite the arrival of 2,000 tonnes from Kuching yesterday.

Industry sources said there was more than 50% less cement in the market compared to three weeks ago when the crisis first started.

They estimated that Sibu required between 15,000 and 17,000 tonnes monthly.

“The output for our ready mixed concrete factory is more than 60% lower this month,” its director, who declined to be named, told The Star.

He said under normal circumstances, his factory required more than 3,000 tonnes a month.

“Our factory is open everyday, but the workers have no work to do.”

According to him, the shortage began in early December when he was notified by the state’s sole cement manufacturer, CMS Cement Sdn Bhd, that its Bintulu factory had broken down.

It took the Bintulu factory, which had a daily production capacity of 1,800 tonnes, about four days to resume production, but it could not cope with the overwhelming demand in Bintulu itself and also from Miri and the Murum dam in Belaga.

The Bintulu factory supplied most of the cement by land for the ready mixed concrete industry while the Kuching factory supplied construction and building industries in Sibu.

The director said the problem was aggravated by the poor weather in Kuching which prevented or delayed the loading of cement into cargo vessels bound for Sibu.

He said the most affected were the 13 ready mixed cement factories in Sibu.

“We all are incurring heavy losses and still in the dark as to when supply will return to normal.”

A contractor, Alan Kong, said he had to stop all work before Christmas because there was totally no cement for the past several days.

“I am worried because our suppliers could not assure me when supply would return to normal,” Kong said, adding that many of his clients wanted to move into their new homes or start doing business in their new shops before the Chinese New Year.

Kong said he was also worried about how to pay his workers when they returned from the Christmas holidays.

“In our line of work, no cement means no work, and no work means no income and no money to pay salaries.”