July 05, 2008

UAE cement producers cut prices by 6%

Reuters reported that cement producers in UAE have agreed with the Ministry of Economy to cut their prices by almost 6% with immediate effect as part of a federal drive to control inflation.

The ministry said in that the producers agreed to lower their prices for a 50 kilogram bag to AED 16 from AED 17 and to increase their production by two thirds to 250,000 bags per day. The ministry did not immediately give details about UAE cement production and the planned increase.

Mr Ahmed Saif Belhasa chairman of the UAE contractors association said in the statement that "The signing of the agreement is very timely since, besides controlling the price of cement, it also positively influences different market trends.’

Cement prices have been rising, in part because of higher fuel costs. UAE demand for cement could rise to 26.2 million tonnes by 2011. Between 2003 and 2006, cement consumption in the UAE grew at a compound annual growth rate of 24.7% and this is expected to be sustained in the future as the smaller emirates join.