The Cement and Concrete Association of Malaysia refuted concerns that a hike in cement prices would impact house prices, saying that cement price is not the cause of growing home prices in Malaysia.
In fact, cement price related materials showed no decline in prices even as cement prices had significantly fallen.
From Q1 2016 to Q4 2018, home prices in Malaysia have grown by 13 percent, while cement prices have been on the downtrend during such period, it said in a statement.
Read More: Learn How To Quickly Sell Your Property In Malaysia?
The statement came after a meeting with the Minister of Domestic Trade and Consumer Affairs on 18 June, reported The Star.
During the meeting, the association addressed the impact of a cement price hike on house prices and the construction industry as well as explained the challenges by the industry.
It underscored that the fluctuation of cement prices was not connected to other building material prices.
With cement prices in the country among the lowest in the region, net cement price adjustment by companies was aimed at restoring prices to the level for these companies to survive.
“Net cement prices have been on a decline and reaching levels that are lower than total operating costs and depreciation,” it said.
“Lower cement prices and higher operating costs have caused the member companies to suffer significant losses.”
Lafarge Malaysia, for instance, suffered losses of RM405.4 million in FY2018, Hume Industries RM119.1 million while Tasek posted a RM31.2 million loss. CIMA’s audited 2017 financial statement also showed losses, while YTL Cement’s results were not available.
“Collectively, the companies incurred losses near RM1 billion over nine quarters. They had to lower their operating costs by mothballing kiln lines, cutting staff benefits and undertake significant retrenchments,” it said.
“If this situation persists, we fear that there will be an adverse impact on the country’s GDP and thousands of jobs, direct and indirect, will be at risk.”
Let us help you determine your eligibility and how much the banks will loan you using our ‘Home Loan Pre-Approval’, with a 99.9% accuracy! Click here.
