Builders ask cement makers to cut down prices

By Kazim Alam, The Express Tribune

KARACHI: Members of the Association of Builders and Developers of Pakistan (ABAD) threatened on Saturday to bring construction activities to a halt throughout the country in two weeks if cement manufacturers did not reduce cement prices by about 30%.

Addressing a meeting of ABAD members, which was also attended by the media, ABAD Chairman Mohsin Shiekhani said the price of a 50-kilogramme bag of cement went up to Rs435 from Rs365 in the last six months. “Cement manufacturers have formed a cartel. They claim that cement consumption has gone up, creating a gap in its demand and supply. If that’s true, why don’t they use the idle capacity of their plants, most of which currently operate at 60%-70% capacity?”

ABAD is the representative body of Pakistan’s builders and developers with over 700 members from all provinces. It has demanded that the cost of a 50kg bag be brought down to Rs300.

ABAD members unanimously decided to hoist black flags and put up banners at all construction sites in Pakistan, condemning the rise in cement prices.

If prices remain unchanged, another meeting will take place on April 28 to announce a formal halt in construction activities throughout the country. “There will be no purchase of cement, and no construction activity, after April 28 if our demands are not fulfilled,” he said. Meanwhile, ABAD representatives also vowed to renew their efforts and make the Competition Commission of Pakistan (CCP) – the regulatory body to check cartelisation – take punitive measures against cement manufacturers. Saying that former CCP Chief Khalid Mirza made significant breakthroughs in checking the alleged cartelisation in the cement industry, they said he had brought down the per-bag price of cement to Rs300. The performance of the new CCP chief has been less than satisfactory, they added.

Speaking on the occasion, ABAD Chairman (South Region) Saleem Kassim Patel said the increase in cement prices on the pretext of the hike in global oil demand made little sense, as most cement manufacturing plants used coal and gas.

He added that the price of coal had gone down from $128 per ton in July 2011 to $120 per ton in the international market. “Besides, gas is used to fire cement plants in the summer, which is also a cheap source of energy.”

Published in The Express Tribune, April 15, 2012.

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