Cyprus Cement, the island’s second largest cement producer plans to hike cement prices by 8.5 to 9.5% or CYP 3 per metric tonne to cover rising production costs.
George Galatariotis, Chairman of CSE listed Cyprus Cement (CCC) told the Financial Mirror that the CYP 3 per tonne price increase will be made from the beginning of June.
Cyprus Cement plans to inform its clients of the move starting on May 10-12, according to Galatariotis, who described the price hike as inevitable, considering the massive increase in production costs.
Specifically, the payroll costs at CCC have risen by 60 cent per tonne from May last year, while charcoal costs are up CYP 1.62 per tonne, fuel costs as are 16 cent, repairs & maintenance 23 cent and other raw material costs (including truck driver delivery costs) are up 37 cent per metric tonne.
“The CYP 3 per tonne hike covers exclusively our added costs,” said Galatariotis, who nevertheless insists that this will not have a profound impact on the construction industry.
“Cement costs makes up only 3% of the whole construction cost, so in my opinion, this will not lead to higher house construction prices,” said Galatariotis. The other costs needed for a house construction are 45% for labour, 5% steel and the remaining 45-50% on architecture and other consultancy fees, decorations, electromechanical and others.
Following the decision by CCC, the Ordinary Portland Cement prices in Cyprus will rise form CYP 32 per tonne to CYP 35 per tonne while the price of Composite Portland Cement will rise from CYP 31 to CYP 34 per tonne.
“Despite the planned hike, cement prices in Cyprus continue to remain below European levels,” said Galatariotis.
It is not year clear if Vassiliko Cement Works, the island’s largest cement producer will join in the price increase.
NO THREAT FROM IMPORTS
Galatariotis does not expect a flood of cement imports, considering the lack of available cement in the region and the ever rising demand stemming from reconstruction works in Iraq, which is absorbing anything available from Turkey, Syria, Lebanon and even Egypt.
He expects that demand for cement, which is currently up by 10% since last year will not be affected by the price increase, with cement consumption remaining close to 1.53 mln metric tonnes.
For the whole of Cyprus, including the Turkish Cypriots, total consumption is seen around 2 mln tonnes, with construction activity seen picking up in the north following the initial shock from the flood of legal cases against those exploiting Greek Cypriot properties in the north.
