GEISHA KOW­LESSAR-ALON­ZO

geisha.kow­lessar@guardian.co.tt

Uni­ver­si­ty of the West In­dies econ­o­mist, Dr Vaalmik­ki Ar­joon, says Trinidad Ce­ment Ltd's (TCL) im­pend­ing ce­ment price hike of 7 per cent from Feb­ru­ary 17, un­der­scores the need for a ro­bust com­pe­ti­tion pol­i­cy to pro­tect con­sumers from un­fair price in­creas­es, high­light­ing the need for at least one oth­er lo­cal ce­ment provider ca­pa­ble of com­pet­ing with TCL.

In an in­ter­view with Guardian Me­dia yes­ter­day, Ar­joon said this pric­ing strat­e­gy is typ­i­cal of a mo­nop­oly, where the sup­ply and price of ce­ment are con­trolled by a sin­gle sup­pli­er, TCL.

"As the sole sup­pli­er, high­er prices al­low TCL to main­tain and in­crease its prof­it mar­gins, giv­en that de­mand for ce­ment will con­tin­ue to be high due to its es­sen­tial role in con­struc­tion and in­fra­struc­ture. The re­cent­ly an­nounced 7 per cent price hike fol­lows a se­ries of an­nu­al in­creas­es since 2021, fur­ther el­e­vat­ing con­struc­tion costs for de­vel­op­ers, con­trac­tors and in­di­vid­ual builders," Ar­joon said.

He al­so not­ed that even though the du­ty on hy­draulic ce­ment im­ports was re­duced from 20 per cent to 10 per cent last year and im­port quo­tas were lift­ed, the mar­ket re­mains un­com­pet­i­tive, not­ing that con­di­tions for fos­ter­ing com­pe­ti­tion are still lack­ing, with po­ten­tial im­porters fac­ing chal­lenges in ac­cess­ing ad­e­quate for­eign ex­change.

Ul­ti­mate­ly, Ar­joon said, these added costs are passed on to con­sumers in the form of high­er prices for new res­i­den­tial and com­mer­cial prop­er­ties, whether still un­der con­struc­tion or yet to be built.

"Such cost in­creas­es es­pe­cial­ly wors­en af­ford­abil­i­ty for first-time home­buy­ers at low­er- and mid­dle-in­come lev­els, as well as for cur­rent home­own­ers plan­ning ren­o­va­tions," he said.

In ad­di­tion, Ar­joon said new units en­ter­ing the mar­ket are like­ly to car­ry el­e­vat­ed rental prices to re­coup ex­pens­es. In the short term, fin­ished prop­er­ties al­ready on the mar­ket may not see an im­me­di­ate price change as they will be un­af­fect­ed by the im­pend­ing hike in ce­ment prices. How­ev­er, as buy­ers per­ceive these ex­ist­ing units to be com­par­a­tive­ly cheap­er, their de­mand—and thus prices—could rise.

Fur­ther, he warned that con­tin­ued price hikes may ren­der small­er res­i­den­tial de­vel­op­ments less prof­itable or de­lay them al­to­geth­er, with de­vel­op­ers fac­ing nar­row­er prof­it mar­gins or need­ing more fi­nanc­ing to cov­er bal­loon­ing ma­te­r­i­al costs.

Ar­joon al­so not­ed that Gov­ern­ment-fund­ed projects—roads, bridges, schools, hos­pi­tals and sim­i­lar ini­tia­tives—will al­so be­come more ex­pen­sive to com­plete, lead­ing to cost over­runs, in­creased bor­row­ing, project post­pone­ments, and, ul­ti­mate­ly, a larg­er fis­cal deficit.

Guardian Me­dia was told by an of­fi­cial at the Trinidad Ce­ment Ltd (TCL) on Wednes­day that ce­ment will in­crease by sev­en per cent, be­gin­ning with bagged ce­ment.

TCL's bagged prod­ucts—such as Pre­mi­um Plus, Eco Ce­ment and Plas­ta Mas­ta—are ex­pect­ed to be in­creased on Feb­ru­ary 17. That is al­most a year to the day since it was last in­creased, TCL con­firmed on Wednes­day, while the in­crease in bulk ce­ment will take ef­fect from March 5.

Dif­fer­ent hard­ware stores cell ce­ment at vary­ing prices.

One store told Guardian Me­dia that the mark-up price takes in­to con­sid­er­a­tion sev­er­al fac­tors in­clud­ing trans­porta­tion cost.

Checks re­veal that ce­ment are cur­rent­ly be­ing sold around $58 to $53 dol­lars per bag.

Pric­ing is in­di­vid­ual choice-TTMA

Con­tact­ed yes­ter­day the T&T Man­u­fac­tur­ers' As­so­ci­a­tion (TTMA) said it can­not com­ment on the in­ter­nal de­ci­sion-mak­ing process­es of its in­di­vid­ual mem­bers.

It said pric­ing de­ci­sions are made in­de­pen­dent­ly by each com­pa­ny based on their own mar­ket sus­tain­abil­i­ty and strate­gic con­sid­er­a­tions.

"As an as­so­ci­a­tion, we re­main com­mit­ted to sup­port­ing a com­pet­i­tive and sus­tain­able man­u­fac­tur­ing sec­tor in Trinidad and To­ba­go," the TTMA added.