Cement producers lost RM1b, insist cement price not linked to expensive housing

The Domestic Trade and Consumer Affairs Ministry has reportedly issued notices to cement producers to explain why they raised prices. ― Picture by Yusof Mat Isa
The Domestic Trade and Consumer Affairs Ministry has reportedly issued notices to cement producers to explain why they raised prices. ― Picture by Yusof Mat Isa

KUALA LUMPUR, June 20 — Three of Malaysia’s biggest cement producers have been suffering losses close to RM1 billion over the past nine quarters, a cement group said today.

In a press statement, the Cement and Concrete Association of Malaysia refuted claims that the price of cement is behind rising house prices.

“We would like to clarify that cement price is not the cause of rising house prices.

“According to the Malaysian House Price Index (MHPI), published by the Ministry of Finance’s National Property Information Centre (NAPIC), house prices in Malaysia have increased by 13 per cent between 1Q 2016 and 4Q 2018 against declining cement prices.

“Many cement related building materials have not shown much decline in their prices despite cement prices deteriorating significantly. This means the fluctuation of cement prices is not correlated to many of such building material prices,” said the statement.

It shared a chart showing the losses suffered by three public listed cement manufacturers — Lafarge Malaysia, HUME Industries and Tasek — since the first quarter of 2017 (1Q17) up to 1Q19 which amounted to nearly RM1 billion.

The result of the losses incurred has forced cement companies to take actions to lower their operating costs by mothballing kiln lines, cutting staff benefits and retrenching staff.

“If this situation persists, we fear that there will be an adverse impact on the country’s GDP and thousands of jobs, direct and indirect, will be at risk,” said the statement.

The Domestic Trade and Consumer Affairs Ministry has reportedly issued notices to cement producers to explain why they raised prices.

Suppliers had previously said that cement prices would be increased by between 40 and 50 per cent on June 15 or July 1, New Straits Times reported.  

Related Articles