Jordanian cement firm set to face legal action
Jordan Cement Factories Company must retract a decision to raise cement prices or face legal action from the country’s government as prices soar
Unless the Jordan Cement Factories Company (JCFC) retracts a recent decision to raise cement prices, the government will take legal action against the firm, according to a senior official at the country’s Ministry of Trade and Industry.
The official, who does not wish to be named said that the company’s move to increase the price from JD60 to JD63 per tonne was “unjustifiable and the company should certainly reconsider it.” The ministry has contacted the firm and is waiting for a reply.
Samer Biriqadar, general manager, JCFC said the firm had to raise the cement prices due to the higher production expenses it incurs. Since the beginning of 2004 fuel prices have increased by 35% according to the official.
“While the increase in production cost is estimated at JD5 for each one tonne of cement, the company decided to increase the cement prices only by JD3 per tonne,” Biriqadar explained.
Biriqadar pointed out that despite the recent price rises, JCFC is still cheaper compared to many regional markets. While the prices of locally-produced cement stands at roughly JD63 per tonne, it is sold in Syria and Iraq at JD103 and JD67 respectively.
However, Dherar Sarayrah vice president, Jordan Construction Contractors Association (JCCA) claims that domestic cement prices are much higher than the prices in many of the Middle East’s other regional markets.
“Let’s take Egypt as an example. The cement prices there are only around JD40 per tonne,” he said.
Furthermore, Jordanian contractors have said that the JCCA will petition the government to force the company to cancel its decision. Otherwise, “we will start contemplating the possibility of importing Egyptian cement.”
While the company produces 14 000 tonnes of cement every day, the local market uses 9000 to 10 000 tonnes, and the remainder is then sold on to the Iraqi, Syrian and Palestinian markets.