Economy & Market
Tokyo Cement against price controls in Sri Lanka, wants markets to rule
Tokyo Cement, the largest cement producer in Sri Lanka, has called on the government to end controls and allow the market to set prices, according to Colombo's Daily Mirror. In 2015, the government introdu¡ced a price ceiling of LKR870 ($6.00) for a 50 kg bag of cement, at a time when local prices were LKR930-940.
Since last year, the Sri Lankan rupee has depreciated in value, raising the cost of clinker imports and raising costs further down the supply chain.
Managing Director of Tokyo Cement, SR Gnanam, said: "An unequal playing field has been created through the current national policy that imposes price controls on cement, while allowing unlimited, duty-free entry for imported varieties."
The price ceiling and the availability of imported cement has contributed to a boom in demand, especially from residential consumers.
In FY15-16, Sri Lankan consumption reached 6 million metric tonnes per annum, up from 5.4 million metric tonnes per annum in FY14-15. At the beginning of June, LafargeHolcim announced that it was to quit the Sri Lankan market with the sale of Holcim Lanka.