KL liberalizes cement imports to ease shortage

KL liberalizes cement imports to ease shortage

KUALA LUMPUR (AFP): Malaysia has liberalized cement imports to overcome an increasingly acute shortage of the building material, officials and reports said yesterday.

Domestic Trade and Consumer Affairs Minister Abu Hassan Omar said the cabinet decided on Wednesday to issue licenses allowing import of cement for up to five years after being convinced of the seriousness of the cement crisis.

"The importation of cement will be open to everyone from now. All they have to do is apply for a license from the ministry's enforcement department, " the Star quoted Abu Hassan saying.

Although there was no official ban, the government had in the past discouraged the import of cement to protect the local industry.

Trade officials said importers would have to pay 25 ringgit (US$10.00) each for the license.

Officials said importers, however, must sell cement at prices fixed by the government, officials said. Approved retail prices for cement are between 180 ringgit and 192 ringgit a ton.

Local producers will be asked to produce a specified amount of cement to allow the government latitude to plan long-term supply, Abu Hassan said.

There are eight cement companies operating 10 plants in Malaysia producing an estimated 10 million tons a year, while industry officials estimated local demand "conservatively" at 11 million tons.

Experts have blamed the acute shortage on the limited number of local cement plans and massive growth of the construction sector in recent years.

"But the crux of the problem is the government's rejection of a request by local producers to raise prices, citing inflation worries," a cement producer said.