Cement gets harder to pay for in UAE with price hike

A price hike by UAE cement manufacturers will send ripples through the construction industry.

Cement manufacturers in the UAE raised their rates as much as 15 per cent today in a move that will affect all levels of the construction industry.

Contractors say they cannot afford the increases. "Our margins are extremely thin," said Matti Mikkola, chief executive of Dubai Precast. "Anyone in the construction industry is just trying to survive."

All the major cement manufacturers sent out notices last week advising clients of the increases. The prices reflect an increase in electricity and production costs, manufacturers say.

The volume of cement production has also dropped dramatically in recent years in the wake of the construction down turn in the UAE.

Prices are now generally between Dh200 and Dh250 a ton, far below the Dh420 a ton the manufacturers were charging during the building boom. The increases announced last week were generally about Dh30 a ton.

The price hikes will send ripples through a construction industry still reeling from the sharp reduction in development in the last two years.