Cement prices soared to Dh240 per tonne at the beginning of this month, a 20 per cent increase over last months Dh200, said an industry source.
Salem Abdullah Salem, a UAE businessman and investor in the cement industry, attributed this rise to the increase in local demand because of the construction boom in the UAE, particularly Dubai.
Huge construction projects in Dubai are the main reason behind the steep increase in the prices of all building materials, not just cement, he said.
Cement prices witness steady and sharp rises from one day to the next.
Salem pointed to the price of a tonne of cement eight years ago, when it was only Dh80, and cement factories suffered major losses. The picture is completely different now as the UAE is witnessing a variety of mega projects being executed in different parts of the country, he added.
Engineer Taha Yassin Al Zubairi, sales manager at Al Saqr Cement Company, said most local cement factories have informed their customers in contracting companies and traders in building materials about the latest increase in prices which is a result of an increase in the price of raw materials, the growing local demand, and the increase in freight rates after many Far Eastern companies hiked prices.
The UAE market has been witnessing a steep increase in cement prices for almost six months.
In response to this uncertain situation, owners of contracting firms have submitted a complaint to the UAE Contractors Association, seeking compensation for their losses.
They also called for speeding up the establishment of a higher council for the building and construction sector, which was approved by the Cabinet last year.
Humaid Al Mannie, the newly appointed general manager of the association, said owners of contracting companies suffering losses due to the spiralling prices were asked to submit a financial report on their losses from January 2002 to April.
A circular to this effect was issued and distributed to the affected companies.
Only contracting companies which are members of the association will be compensated.
Meanwhile, the Gulf Cement Company has adopted an ambitious plan to increase production to meet the increasing local demand and the requirements of regional markets.
Sheikh Omar bin Saqr Al Qasimi, chairman of the companys board of directors, stressed the need to promote the cement industry by employing the latest technologies.
The plan will be implemented in three phases, the first of which is increasing production to make up for the shortage in local and regional markets. The second phase will see the opening of a new cement mill, and the third phase the setting up of a handling facility in Saqr Port in Ras Al Khaimah, which is expected to be completed by the end of next year.
Gulf News
