Cement price goes up

Running dry:Sibu is experiencing acute shortage of cement.

KUCHING: Sarawak’s sole cement manufacturer CMS Cement Sdn Bhd will raise the prices of its product by 5% to 9%.

The move will take effect this Feb 17, which will be the first since the last 5% hike in 2011.

Managing director of parent holding Cahya Mata Sarawak Bhd (CMS) Datuk Richard Curtis, said although the company’s production cost went up by 14.5% between 2009 and last year, it had only increased prices by 5.2% throughout the five-year period.

“It is not sustainable for CMS Cement to continue absorbing the increased production cost and at the same time, to continue making necessary substantial capital investments required to ensure that it remains positioned to meet the growing needs for cement and precast products in the state.

“We do it (price increase) reluctantly but necessarily,” he told a media briefing at Kuching Hilton here yesterday.

During the same 2009-2013, Curtis noted that other construction material costs increased by 17% to 70%.

“Absorbing increased production costs ourselves over the past five years, without compromising on international standards of quality, is indicative of our vision to support Sarawak’s growth and development.

“Moreover house prices in Sarawak had increased by over 30% between 2009 and 2013, despite cement prices increasing by only 5.2% in the same period.

As such (I expect that) the latest hike would have minimal impact on the construction industry as cement comprises merely 2% of overall costs in property development,” he said.

With the latest increase, Curtis said cement prices in Sarawak would be comparable to those in Peninsular Malaysia.

CMS Cement, which currently owns grinding plants in Pending here and Bintulu with combined installed capacity of 1.75 million tonnes per annum, produces and market portland and masonry cements.

The company supplies bulk and bag cements to some 25 dealers statewide. These dealers determine the retail price of the construction commodity.

A 50kg bag is now marketed between RM18 and RM22, depending on locations.

About 55% of the cement supplied by CMS Cement to dealers are in bulk.

Curtis said CMS Cement had projected sales of its products to grow to 1.72 million tonnes this year from 1.67 million tonnes last year.

“An estimated 200,000 tonnes of cement will be imported this year against 275,000 tonnes last year,” he added.

CMS Cement has invested more than RM56mil over the last six years, including in cement terminals in Sibu and Miri, to improve its pan-Sarawak distribution capability. The terminals enable more customers the option to purchasing bulk cement and thus, shortening the delivery time.

Additionally, Curtis said another RM80mil had been forked out to upgrade the company’s clinker plant in Mambong near here in raising its production capacity and improve its operational efficiency and production quality.

Clinker is a key raw material in cement manufacturing.