NewsWhore
06-14-2006, 03:10 PM
The cement industry in the Dominican Republic is losing millions. In fact, according to sources, they have lost more than RD$100 million since last November as a result of an ill-advised price war. The Dominican government's coffers have also suffered from the situation, revealing a decrease of RD$85 million per month in reduced income from taxes, according to spokesmen for the Cement Producers Association.
According to association numbers reported by the Listin Diario, the price was instituted when a new player arrived in the local market. Jean Alain Rodriguez, the executive director of Domicen, the newest cement provider, admitted that "things got a little out of hand" when his company entered the market competing with lower prices.
When the cement producers reversed the price trend and nearly doubled the price, the government stepped in and asked them to put a halt to the price increases, and, if possible, to bring them down a bit. The producers acquiesced and currently the price for a bag of cement is US$3.79, somewhat lower than cement in Colombia and Venezuela. During the price wars the cement was being sold for as little as US$2.18. The association recognized the importance of cement in the construction sector but pointed out that, generally speaking, it only represented 8% of the raw material costs of a building on a per kilogram basis. Paint (RD$148.80) and rebar (RD$31.96) are much more expensive than cement (RD$1.65) per kilogram.
Link To Original Article (http://www.dr1.com/index.html#8)
According to association numbers reported by the Listin Diario, the price was instituted when a new player arrived in the local market. Jean Alain Rodriguez, the executive director of Domicen, the newest cement provider, admitted that "things got a little out of hand" when his company entered the market competing with lower prices.
When the cement producers reversed the price trend and nearly doubled the price, the government stepped in and asked them to put a halt to the price increases, and, if possible, to bring them down a bit. The producers acquiesced and currently the price for a bag of cement is US$3.79, somewhat lower than cement in Colombia and Venezuela. During the price wars the cement was being sold for as little as US$2.18. The association recognized the importance of cement in the construction sector but pointed out that, generally speaking, it only represented 8% of the raw material costs of a building on a per kilogram basis. Paint (RD$148.80) and rebar (RD$31.96) are much more expensive than cement (RD$1.65) per kilogram.
Link To Original Article (http://www.dr1.com/index.html#8)