Colombia’s cement price rose 8% in 1H13

In 1H213, cement prices in Colombia rose eight per cent, well above the country’s inflation rate of 1.73 per cent in the period, according to a report in El Tiempo.

The price also compares unfavourably with other Latin American countries. Based on sales at retail stores, Colombian customers can pay up to US$250/t in a city away from any cement plant, while in Peru this price is US$158/t and in Argentina US$199/t. In Panama and Costa Rica, customers pay US$227 and US$240/t, respectively.

However, the Colombian Chamber of Infrastructure said that each country has different cement pricing structures, depending on energy, transportation, packaging and sales tax costs.

Indeed, according to the National Administrative Department of Statistics (DANE) in Colombia, cement prices in 1H13 rose by just 0.46 per cent, implying that other factors, such as transportation and taxes, may be responsible, rather than cement producers.

Nevertheless, the perceived price increase reopened a debate in parliament regarding its effects on the construction industry. Representative David Barguil said the price rise is allegedly caused by a lack of regulation of the Superintendency of Industry and Commerce (SIC) against the three largest cement companies – Holcim (Colombia), Cementos Argos and Cemex.

Luis Bernardo Naranjo Ojeda, analyst at Losdatos.com, conceded that in the current political climate and electoral framework, the government is expected to take issue with companies, but pointed to increased competition in the market. “There are no entry barriers – quite the opposite. How would you explain the presence of new producers,” he said. Cementos Tequendama, La Fortaleza and the Special Free Zone of the Magdalena Cement Company have recently entered the market or are preparing to do so in the near future.

In 2005, SIC imposed a US$3.183m fine on the three cement makers for a pricing agreement.