Oversupply and weak demand still plague cement industry


IT IS unlikely that the cement industry would make a comeback anytime soon, as the sector is still being hit by the state of oversupply and weak domestic demand.

Although demand recovery is in order, following the revival of mega-projects, it is expected to remain uninteresting as the fate of several other massive infrastructure projects is still unknown, coupled with an overhang in the property sector.

Higher electricity tariffs by Tenaga Nasional Bhd have also affected cement companies, as it represents some 20% of the total production cost, according to MIDF Research.

Cement counters began to take a beating after the general election in May last year, following the suspension of mega-projects after the Pakatan Harapan administration took over.

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