Mar 24 2006 |
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Jordan: Cement prices to stabilise in April
AMMAN -- The Kingdom's cement market will stabilise as soon as the new hike in the price of oil derivatives is announced by the government in April, according to Mountaser Akhleh, secretary general of the Ministry of Industry and Trade (MoIT).Cement prices rose during 2005 by 18 per cent partly as a result of the government's plan to lift oil subsidies by March 2007, leading to an increase in the price of oil derivatives.
The boom in the Kingdom's real estate sector, which witnessed a 20 per cent growth last year, and maintenance work being carried out on the Kingdom's two cement producing factories has also added to a shortage in the market, sending cement prices soaring to more than JD125 per tonne, compared to JD74 this time last year.
Akhleh told The Jordan Times yesterday he expects prices to keep rising then stabalise once the government implements its decision to further increase oil prices by 25 per cent at the beginning of next month.
Spokesperson for the Jordan Construction Contractors Association, Waleed Baydoon, said more than 50 contractors have complained this week that they were unable to complete work on projects as a result of the shortage.
In order to offset the current cement shortage, the MoIT approved on Tuesday a decision allowing the Jordan Cement Factories Company (JCFC) to import cement to meet market demand.
The JCFC yesterday imported 10,000 tonnes of cement from Egypt, which it said would alleviate immediate demand.
Akhleh said that the MoIT announced this week that "exporting cement is prohibited until the local market's demand is fully met."
The JCFC is the sole cement producer in the Kingdom.
In 1998, the French cement company Lafarge bought a 33 per cent stake in the JCFC for JD72 million in what was considered the first major privatisation step in the Kingdom.
The French company increased its stake in 2002 and is now the major shareholder with 48.1 per cent. The Social Security Corporation is the second major shareholder with 23.3 per cent.
This year, the JCFC is planning to produce 5.5 million tonnes to meet the expected increase in local demand.
In order to offset the impact of rising oil prices, the company said this week it has been studying alternative energy sources, particularly the use of oil shale for power generation.
By Khaled Nuaimat
© Jordan Times 2006
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