Venezuela: supply issues raise cement prices 50%

Venezuela’s cement companies started the year with operational issues, which have resulted in an irregular supply to customers and a poor performance of the construction industry. This has impacted on prices, which have seen an upward trend for some cement types.

In 2013, cement output fell and in the third quarter, production fell 10.5 per cent. Construction sector sources said that Industria Venezolana de Cementos (Invecem), Fábrica Nacional de Cementos (FNC) and Cementos Venezuela are not operating at full capacity.

At Invecem, which was the only state-owned cement company to operate at full capacity in 2012, has had to halt one of its lines – a scenario which is not expected to change until March at best. FNC currently lacks spare parts while Cementos Venezuela is experiencing problems with its kilns and other equipment.

The Venezuelan government plans to inject more funds into the industry. An initial amount of VEB5.3bn will be allocated to Invecem and FNC – up 62 per cent from the 2013 funding. However, it is expected that both companies will generate 3.7Mta of cement.

The government has also notified construction companies that the cost of bulk cement since 27 January is VEB1100/t, a 49.5 per cent increase YoY.