Intensifying price rebates?As we understand, sluggish demand (as seasonal lull was aggravated by lingering construction labour setback) and high stock levels have triggered an intense price war among cement companies in December 2002, which lasted up to mid-January. The price rebate jumped from an average RM20 per tonne, or about 10% for bulk and bag cement, to as high as RM33 per tonne, or 17% at the height of the price war in early January. Such aggressiveness had not been seen in the past two years.
As demand slowed, it was not surprising that cement players started to cut back production from August 2002, hitting a trough in September. As of November 2002, industry output was still some 6%–7% lower than before the labour crunch, and about 6% below November 2001.
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