The government will not accept the increase in cement prices for 2012 announced by the construction sector.
Sector representatives from the country's chamber of industry and construction (Chico in Spanish) claim that the $0.48 price rise is due to the devaluation of Honduras' currency as well as increasing energy and fuel costs.
"Regarding the causes claimed by Chico, the government's Secretary for Trade and Industry (SIC in Spanish), Francisco Zelaya, commented that he thought they were made up," reports an article in Latribuna.hn.
Although they have not yet reached the volume of sales before the 2008 crisis, growth in cement is an encouraging sign.
Due to the economic crisis which affected the construction sector, the sale of cement had fallen 20% since 2007. This year it has rallied and reported growth of 10%, but still hasn’t attained the 2007 levels, said Carlos Castillo, regional vice president of Cementos Progreso.
The cement companies Cenosa and y Lafarge-Inhcesa have again increased product prices in a unified manner, defying the rules of the Commission in Defense of Competition (CDPC in Spanish).
Both companies have been making simultaneous increases in the price of concrete for several years, provoking an investigation by the CDPC. This investigation determined the existence of practices that restrict free competition, including price fixing and market sharing.
Holcim will have to pay a 5% tax in favor of the municipality of Metapán for each bag of cement produced.
The law decree states that each 94.5 pounds of cement produced will have a 5% tax on the selling price and the amount will be paid to the municipality of Metapan. Likewise, a 5% tax on the sales price will also be applied to production of cement powder known as clinker.
In May 2010 the local price of iron was up 9.3% and cement 8.4%, relative to May 2009.
An article by Fernando Quiñonez for Sigloxxi.com reports comments and opinions from members of the Guatemalan Construction and Industry Chambers regarding the price rises.
The increases, together with a lack of measures to stimulate the economy, has led the industrial sector to postpone factory expansion plans, comments the executive director of the Chamber of Industry (CIG), Javier Zepeda.
As the price of construction materials increase, so does the price of homes, which has risen between 5% and 10% for residences worth more than $30.000.
Steel, cement and premixed concrete together got $600 more expensive, and taxes paid when selling a home, were hiked from 5% to 7%.
“Eduardo Ameglio, president of Convivienda (National Home Promoter’s Council), explained that back in summer, developers assumed these increased prices for construction materials”, reported Laestrella.com.pa. “This lead the construction industry to review its annual operation costs”.
The Mexican cement company will produce low-cost cement for a public social housing project in Nicaragua.
The product will be labeled using the "Cemento Popular" (Popular Cement) brand, and packed using special bags for this government project.
"Maximum production will be 47.000 monthly bags. It will be used in the construction of 4.000 low-cost homes, funded with $90 million from the Nicaraguan Social Security Institute and commercial banks", reported Cnnexpansion.com.
After several negotiations with the cement industry, the Government authorized an increase of $0.37 (7 lempiras) in the bag of cement.
According to the negotiations between authorities and the company Lafarge-Incehsa, this increase will occur in two phases: $0.16 (3 lempiras) on January 20 and $0.21 (4 lempiras) on January 28.
"With this increase, the price of a 42.5 kilogram bag will increase from $66 to $70", reported Laprensa.hn.
The Government of Honduras announced measures against those who apply a price increase announced by cement company Incehsa.
Benjamín Bográn, Industry and Commerce Minister, said that cement "is an important element in housing and infrastructure, so any increase must be first agreed with the Ministry".
An article in Elheraldo.hn reports that the price of cement now stands at 99.96 lempiras ($5.29) wholesale and 119 lempiras ($6.30) at hardware stores.
The most affected sectors are cement and concrete with a decrease in demand of 20% and 30% respectively.
According to Carlos Gonzalez, country director for Cemex (company which closed 5 concrete plants in Costa Rica), the reactivation of the Costa Rican economy would be achieved with three levers: State investment in infrastructure, increased credit to encourage domestic consumption and "encouragement of direct foreign investment through incentives or improvements to the free trade zone law."
In March 2009, the local price of steel fell by 33.8% and cement rose by 34.3% over the same month in 2008.
The decrease in the price of steel is in response to the decline in international prices, according to Jaime Jované, president of the Panamanian Chamber of Construction, to Prensa.com, who added: "The steel that arrived in the first quarter of this year came with lower prices."
A recent increase in cement prices is being blamed in Honduras for a 30 percent rise in the cost of housing construction.
The Honduran Construction Industry Chamber says construction of the average house now costs 1.3 million lempiras (US$69,000), up from 1 million lempiras (US$53,000).