Sri Lanka cement crisis continues amid price controls

Aug 24, 2011 (LBO) - Sri Lanka's construction industry is facing a shortage of about a million 50 kilogram sacks of cement a month, a media report said as price controls limit supplies and threaten the island's construction sector. Amid the shortages created by price controls, state enterprises have got into the act like in the 'closed economy' days of 1970s when price controls and shortages of even foods were common.

One state agency has also got into a controversy for importing substandard cement.

"At the moment we can estimate that there are about Rs.1 billion worth of contracts being carried out," Sri Lanka's Daily FT newspaper quoted Rohan Karunaratne, president of the Ceylon Institute of Builders as saying.

"The imports by the government are inadequate. On average the government imports range around 200, 000 bags per month and this is even less than 20 percent of the required amount.

"We met with the Chairman of the Sri Lanka Cement Corporation on Tuesday morning and stressed that around 1 million bags are needed urgently to offset the shortage.
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World cement prices have moved up amid a weakening dollar that has sent most commodities rising to new highs. Energy - a key ingredient of cement - is also