cement cartel controls global industry, 51 % of Lankan market
By Quintus Perera
Other than in China and India, the cement industry is controlled
by five major companies called the ‘big Five’ which
have formed into a cartel to dominate the global cement market,
a top Sri Lankan industrialist said.
group now holds a 51 percent market share in Sri Lanka compared
to six percent in 1995 with home grown local companies unable to
compete equally due to their financial and political power while
another key reason is lack of clear government policy and non-consultation
with local industrialists in the respective countries.
was revealed by S R Gnanam, Joint Managing Director, Tokyo Cement
Group at the celebrations in Colombo last week of Tokyo Cement crossing
one million tonnes of cement sales a year - a record for a Sri Lankan
He said that these companies have been found guilty and fined heavily
specially in Europe for forming cartels and price fixing. The same
year there was no share in Philippines but now they have 82 percent
while in Indonesia the share has gone up to 75 percent from just
4.3 percent in 1995.
said that his company was rebuilt through the ashes of destruction
after being shut down in May 1986 having closed for two years due
to extensive damages caused to the factory by unknown persons. The
company was started in 1983 with Japanese investment and got the
best use of the natural resources of Trincomalee harbour. It was
a journey worth celebrating as the 2005 Calendar year was finished
with a 1,079,000 M/Tons which made them the market leader for cement
in Sri Lanka.
was jointly achieved by their operations both in Trincomalee contributing
68 percent and Colombo contributing 32 percent. The sales are made
up of 63 percent bulk sales and 24 percent bag sales in 2005.
there was civil unrest in the country in 1984 the company was operating
far below capacity and due to an unsuccessful IPO and since earlier
efforts with several banks to underwrite their issue were unsuccessful,
the family had to underwrite the issue.
said that from 30 M/tons per hour in 1984 they have now risen to
a capacity of 840,000 M/Tons per annum and this is expected to increase
to a total of 1.8 million per annum in 2007 from Trincomalee alone.
The Colombo terminal commenced in 2001 and the capacity today is
Gnanam paid a glowing tribute to the management, senior managers
and the staff, calling them heroes, whose dedication as a team plus
the using of modern technology in cement industry brought the company
to this great heights.
on the cement business in Sri Lanka he said that Sri Lanka had a
growth rate of 16.5 percent in 2005 when compared to 4 percent in
2004 and a volume increase from 3.2 million Mt in 2004 to 3.7 million
MTs in 2005. The growth was due to the revival of several irrigation
projects, development of apartment buildings, rebuilding and construction
work in the North and East and tsunami relief work.