PETALING JAYA: Conditions on cement imports should be relaxed say a business leader and an economist, amid increasing concerns over a 40% increase in the price of the building material.
SME Association president Michael Kang and economist Barjoyai Bardai said the cement price would be determined by supply and demand if cement imports were made easier.
Kang, whose association represents some 10,000 members, said: “Many of our members are in construction and have already committed to jobs and are now sweating over the increase in cement prices because their costs will increase. We want the government to do something about it.”
“If they cannot control the price, then they must make it easier for people to import cement. Now to import cement you need a permit, and even then, many of those who import only use them for their own projects.”
He said that cement in other countries like Thailand was cheaper than in Malaysia and that many other countries could supply cement if it was made easier to export.
Cement importers must obtain a letter from the ministry and a certificate from the Construction Industry Development Board.
Kang voiced concern over the lack of competition in the cement industry. With no real competitors, the “one company” which controls 85% of the market could set the prices as they want, he said. Yesterday, Ng Seing Leong, a former president of the Real Estate and Housing Developers Association (Rehda), said there was now “an oligopoly in the cement industry”.
Universiti Tun Abdul Razak economist Barjoyai said an artificial market existed because the supply of cement was controlled, and this was why it was better to open up the import market.
If at all the government wanted to help local players, it could look at incentives or lower regulatory costs to ultimately reduce their input costs.
The price of cement usually increased in a property boom but this time the property market is sluggish. “This is strange and I think this is something the government should look into and see why it is increasing by this much now.”
Finance Minister Lim Guan Eng said on Sunday that construction companies had complained of a cement price increase of 40%-50% between June 15 and July 1.