Contractors fear cement price hike, despite ministry intervention
Contractors in Bahrain still fear increases in the price of cement despite government intervention to prevent a 30% hike planned by manufacturers.
The “collusion” between the Bahraini companies was labelled a “monopoly” which “should not be tolerated” by Dr Essam Fakhro, from the Bahrain Chamber of Commerce and Industry (BCCI).
His comments followed a closed meeting with Commerce and Industry minister Dr Hassam Fakhro, in which the price hikes were overruled..
Yet Robbie Ferguson, CEO at Bahrain based Karimeh Construction said demand in Saudi Arabia could drive further increases as soon as this year.
“I still believe we will see price increases as the year moves on and some of the new large projects come online during the second and third quarters,” he predicted.
“The Saudi Arabian market controls the cement and reinforcing steel industries here and if relations remain strong, unlike in 2008, it should be clear sailing. However, the demand as multi-billion dollar projects are undertaken could still bring increases.”
The price of a 50kg bag of cement increased by 33% to BC 1.600, with resistant cement rising 32% to BS 1.650.
Bulk ordinary cement rose 30% to BC30 per ton and bulk resistant cement by 32% to BD31 per ton. There was also speculation the rise would prevent a price war between local factories and cement companies.
Dr Hassam was quoted in regional media likening the cement companies to a “cartel”. The Ministry was called in to prevent the move and help contractors.
A statement from BCCI continued that the move was “inconsistent with the fundamentals of the free market” and that raising prices of cement could lead to similar rises in the costs of other materials, “strongly affecting the competitiveness of the Bahraini market”.
“The sharp increase in the price of cement all of a sudden, is not justified by any objective or logical reasons,” BCCI added.