Cement price hike due to raw material price increases, says CIMA

SEREMBAN (March 23): The current hike in cement prices is due to price increases of raw materials used in the manufacturing process, especially coal, in the international market, said Cement Industries of Malaysia Berhad (CIMA) managing director Sharuddin Omar Hashim.

He said raw materials are experiencing price hikes, including coal which now comprises 30% to 40% of the cost of cement production, thus leaving manufacturing companies no option but to raise prices.

He also added that the current increase in coal prices was driven by Indonesia's export ban, as well as the conflict between Russia and Ukraine.

“Coal prices were previously in the range of US$60 (RM252) to US$70 (RM294) a tonne, but have now increased to US$200 (RM842) a tonne and could possibly reach up to US$400 (RM 1,685).

“The ban on exports from Indonesia to other countries, as well as the Russia-Ukraine conflict, have caused difficulties in obtaining coal supplies, thus causing the prices of raw materials to be high,” he told reporters at the media briefing and appreciation event here on Tuesday (March 22).

He said the prices of other raw materials in cement production had also risen quite highly, following the Covid-19 pandemic, apart from congestion problems in terms of logistics and distribution.

Sharuddin said his company is trying its best to optimise production and reduce production costs through the use of other alternative materials.

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