Contractors’ Association fixes cement import deal

Contractors’ Association fixes cement import deal.

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By  Colin Foreman Published  August 7, 2004

The UAE Contractors’ Association has successfully brokered a deal to import 40 000 tonnes of cement into the emirates from Indonesia. Although the association was unable to confirm when the shipment is scheduled to arrive it did confirm that the cement would be brought in at a price of Dhs200/bag. The price for contractors will therefore be about Dhs220/bag after tax; a 21.5% saving on the current market price of Dhs280/bag. Contrary to recent media reports the deal was not brokered with the assistance of Nakheel Properties. Member companies set to benefit from the deal include: Al Shafar, Ali Moosa, Al Hamid, Al Naboodah, Saleeh Construction, and Al Habtoor Eng’g. According to Musreq Ali Haydar, secretariat editorial, the UAE Contractors’ Association began preliminary work on the agreement several months ago when members began to voice serious concerns about soaring cement prices. “Our members think that the current market price of Dhs280/bag is unfair, they believe Dhs220 to 230/bag is a fair price. After making contact with local cement producers the association began to look for alternative sources of cheaper cement overseas.” The deal with Indonesia is the first agreement of its kind to be arranged by the UAE Contractors Association. “It is important to note that the association is not the importer, it just brokered the deal on behalf of our members,” says Musreq. Further deals are also in the pipeline as the association revealed that talks are currently underway with cement producers in Egypt. It is hoped they will supply another 40 000 tonnes for a similar price. “There will be more agreements like this because the association has so far received hundreds of calls from our members. We have already sent letters to our members asking them to inform us how much cement they need so that we can make arrangements for them,” says Musreq. The association has also begun dialogue with the relevant authorities about the possibility of waiving the duties on imported cement. At present duties of about 5% are levied on imported cement. “The authorities are aware that cement prices are a real problem for contractors at the moment, and are prepared to make special concessions given the current crisis,” says Musreq. Many in the market now fear that the current cement prices may lead to a whole range of problems. Projects are in danger of running over budget, and as contractors strive to cut costs the temptation to procure cement from black market suppliers is a real danger. This cement will not meet specifications and may fail, a long-term danger. Meanwhile such problems have recently been addressed in Qatar, where the authorities have imposed legislation that requires cement to undergo testing to ensure that it meets the necessary standards. This is a reaction to the region-wide cement crisis.

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