The UAE Contractors' Association has called on cement producers in the country to withdraw their decision of increasing the minimum price of loose cement to Dh220 per tonne.
"We are against any increase in cement prices at present," Ahmed Al Mazroui, Vice-Chairman of the UAE Contractors' Association, told Emirates Business. "This increase is useless and local factories will not succeed in implementing it."
He added that any increase in the prices of locally produced cement will lead to an increase in the demand for imported cement, which is sold at lower prices.
Countering claims of domestic manufacturers that this increase was necessary to limit their losses, he said: "This is totally untrue. Increase prices is not a solution; it might, in fact, create further problems for local factories, because the prices of imported cement are logical and acceptable to contracting companies. Any increase in the demand for imported cement might lead to the market moving away from locally produced cement, and then the problem will worsen for domestic producers."
He added that the association was currently co-ordinating with the Ministry of Economy (MoE) to urgently find solutions to the problem. An essential and quick first step for the rescue of the national cement industry from collapse would be to pay contracting companies the payments due to them by some local government entities, he said, so that they could in turn service their dues to the local cement factories.
"The situation in Abu Dhabi is very good – there is no delay in releasing payments. The government makes continuous payouts and construction projects are going ahead without any delay. The delays in payments are happening in Dubai and some Northern Emirates, but this problem is much less now than before," said Al Mazroui.
He said building material prices in the UAE markets had stabilised and the situation was conducive for timely completion of projects at lower and more acceptable costs. This will ultimately lead to a fall in property prices and rents at the national level, he said, which was a big positive for the country. Contractors should take advantage of the current state of the market, Al Mazroui added.
The UAE Contractors' Association yesterday organised in Abu Dhabi the first Arab Forum for Building and Construction in which many contracting companies and contractors participated. Some complained about the delay in receiving payments from a few local government entities.
Dr Mufeed Maslooh, a member of the UAE Contractors' Association's technical committee, said the stability in raw material prices has created new opportunities for some developers and contracting companies to execute new giant projects at competitive and attractive prices, especially in Abu Dhabi. He added that contracting companies in the country were gradually improving their positions.
The forum also saw the unveiling of the first encyclopedia of the UAE's contracting sector.
Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.