The cement market is prepared to increase its capacity and keep pace with growth in construction in the country.
Cemex and Holcim, cement companies founded with foreign capital in the domestic market, say they are prepared to increase their capacity and thereby keep pace with growth in construction in Nicaragua.
These companies will continue to expand their investments in 2014.
Mexico's Cemex will build a new plant for grinding and packing under an agreement with the Compañía Nacional Productora de Cemento.
From the statement released by Corporaciones Nacionales del Sector Público (CORNAP):
Memorandum of Understanding Signed Between Cementera and CEMEX Nicaragua
Thursday, November 21, 2013
The Chairperson of the Board of the Compañía Nacional Productora de Cemento (CNPC) Carmen Reyes García and the representative from CEMEX Nicaragua, Andrés Jiménez Uribe signed a Memorandum of Agreement where the Mexican government authorized the construction company to install and operate a plant for grinding and cement packing facilities outside the cement plant located in San Rafael del Sur.
The construction of megaprojects has caused a high demand for cement and an increase in the prices of the main material for the construction industry.
The fact that only two companies (Argos, and Cemex) lead the Panamanian market has caused prices to skyrocket because they are setting the price of this item. Experts expect that when demand for this raw material decreases, so will prices.
A legal reform will end tax exemptions on cement produced in the provinces of Alajuela, Limón, Heredia and Puntarenas.
A statement from the Legislative Assembly reads:
CEMENT PRODUCTION TAX PAID
The Standing Committee on Financial Affairs has approved the bill number 18164, by which is introduced an amendment to the 6849 Act that relates to the tax of five percent on the cement produced in Cartago, San Jose and Guanacaste.
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 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.
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."