No ceiling price for cement from Thursday

In a separate measure to help liberalise the industry, cement importers would only need to pay 10 per cent import duty, says Malaysia's Prime Minister

THE government will scrap the ceiling price for cement starting from Thursday as it seeks to boost the construction industry.The import duty on cement will also be cut to 10 per cent, Prime Minister Datuk Seri Abdullah Ahmad Badawi said in a statement released yesterday.

Previously, the duty was set at 50 per cent."These cement liberalisation efforts are in line with the government's wishes to ensure that the nation's development is carried out smoothly, apart from ensuring a more efficient and transparent market for cement," Abdullah said.

Importers in Sabah and Sarawak will also be excluded from having to apply for import licences. Currently, importers in Peninsular Malaysia do not need licences as opposed to their counterparts in Sabah and Sarawak.

However, these measures are only applicable to ordinary portland cement and hydraulic cement."These are the most common types used by the construction industry," Ministry of International Trade and Industry senior director Datuk Kamaruddin Ismail explained to Business Times.

Similar to the steel industry, local builders complain that cement is being sold to them above the ceiling price. Producers argue that the extra charges include costs like transport.Abdullah said the demand and use of bagged cement versus those sold in bulk have increased in the local market. At the same time, global cement prices are higher than the ceiling price."The problem has given a negative effect on the construction industry where it will hurt the implementation of national development projects," he added.

Datuk Krishnan Tan, chief of construction group IJM Corp Bhd, welcomed the move."Deregulation is a good thing. In the short term, there's likely to be an increase in cement price," he told Business Times.

Datuk Seri Leong Hoy Kum, group managing director of property developer Mah Sing Group Bhd, said the development ensures a fair and more competitive environment for cement producers and users."As a developer, this benefits us as our contractors will have a steady supply of cement and will be able to import this raw material from regional producers should domestic supply be insufficient to meet demand," he said in a statement.