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Wednesday, July 30, 2008

Export ban on steel bars, cement?

KUALA LUMPUR: Is a temporary ban on export of steel bars and cement on the cards?

It looks like the Government may impose some kind of restrictions to help the construction industry overcome the rising prices of these and other raw materials.

Housing and Local Government Minister Datuk Seri Ong Ka Chuan said he had received lots of requests from developers and contractors that there should be restrictions to control the outflow of essential items.

Ong said his ministry was talking with the Finance Ministry on the matter and was mindful of the fact that priority should be given to meet local demand.

However, for the moment, he felt it would be better to allow the free market system to determine the supply and demand of steel bars and cement, while the Government closely monitors escalating prices and their supplies.

“But if the situation persists, I think the Government has to intervene. We have to make it our priority to the local industries rather than overseas market even if it (the raw material) fetches a better price,” he said.

Ong said this at a press conference after witnessing the signing of a mutual co-operation agreement between I-Bhd and Kompakar Group for the development of a Tier 4 Ready Data Centre in the RM2bil i-City integrated commercial-cum-residential development in Shah Alam.

Meanwhile, the Master Builders Association Malaysia (MBAM) has warned that many medium and small contractors from Class D, E and F may be forced to stop, delay or even abandon projects as a result of the steep price hike of essential building materials.

“The Government should act quickly. If the situation continues to worsen, it should step in and ban export of steel bars and clinkers to ensure building materials manufacturers would supply the needs of the local construction industry first,” said MBAM president Ng Kee Leen.

He said the 10% import tax for cement should be waived as well because contractors and developers were facing great pricing pressure and any form of import tax relief would be appreciated.

Although cement liberalisation was announced on June 5, Ng said the import of cement was still not in place due to logistics.

With liberalisation, cement price had continued to rise from RM10.90 during the government price control period to RM13.20 (22% up) immediately after liberalisation and now another increase by RM1, or 30%, per 50kg bag to RM14.25.

In the case of steel bars, he said, although it was liberalised on May 12, the liberalisation process was not well implemented.

“It was difficult to import steel bars and there are still cases of Customs Department officers demanding for approved permits and/or impose import duty on certain steel bars.

“MBAM hopes the Government would simplify (matters) by making clear the process to import steel bars for local construction use,” he added.

MBAM also requested cement and steel bar manufacturers to provide at least six months' lead time for any announcement on price increase to enable contractors to allocate provisions to mitigate their cost.

Ng said the Lafarge Malayan Cement Bhd's announcement on price increase for cement effective Aug 1 would hurt the construction industry.

Meanwhile, ready-mixed concrete operators in Selangor and Kuala Lumpur yesterday announced revised prices for ready-mixed concrete of various grades by 5.2% to 6.2% effective Aug 1.

By The Star

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