CAA rejects cement price hike plea
By Dinali Goonewardene
The Consumer Affairs Authority (CAA), which has conducted 800 raids on cement outlets in the last 12 days, said it had no plans to increase cement prices despite illegal price hikes on cement.
CAA Chairman Rumy Marzook told the Daily FT that action was being taken to curb illegal rate hikes but that the regulated price would not be raised. Cement prices have been capped at Rs. 750, the regulated price for a 50 kg bag, although the industry has called for a revision of prices.
Reports alleged that a haul of cement manufactured by Tokyo Cement had been detected with a price mark of Rs. 785, although company officials had denied the claim saying this was an old price mark, which had been changed.
Industry players Tokyo Cement, Lafarge and Ultratec have requested that prices be increased, drawing attention to increased production costs. Tokyo Cement and Holcim, which together account for 60 per cent of production, are operating at 100 per cent capacity.
Construction sector GDP has grown by 14.3 per cent compared to 8.5 per in the corresponding period last year. Central Bank data indicated that local cement production in the first five months had increased by 18.3 per cent to 897,000 tonnes on the back of a rebound in the cement industry as the economy expanded by 7.9 per cent in the first quarter of 2011. Cement prices vary regionally due to the cost of transportation.
Reports that suppliers were hoarding stocks to release later have also abounded. The crisis took a new turn with the Co-op importing and selling cement sans official granting of the SLS mark by the Sri Lanka Standards Institution.