The UAE Ministry of Economy and the Cement Producers Group have signed a Memorandum of Understanding (MoU) on Monday to implement the necessary measures to ensure the availability of cement in the local market at reasonable prices, in a move to enhance the national economy and boost the country's comprehensive development process. The MoU was signed by Eng. Sultan Bin Saeed Al- Mansouri, UAE minister of Economy, and Abdullah Mohammed Al-Sayah, president of Cement Factories and Producers Group and general manager of Etihad (Union) Cement Company, in the presence of Mohammed Ahmed Bin Abdulaziz Alshihhi, undersecretary of the Ministry of Economy; Dr. Ahmed Saif Belhasa, chairman of the UAE Contractors Association; officials from the Ministry of Economy; and managers of cement companies and factories in the UAE. Under the terms of the MoU, the Cement Producers Group will increase the production capacity for 50 kg cement sacks from 150,000 sacks to no less than 250,000 sacks a day, while also reducing the price of 50 kg cement sacks from AED17 per sack to AED16. The group also pledged to fix the price of an unpacked ton of cement at AED340 and update the Ministry of Economy with production volume data and any other necessary information every three months. The MoU has allowed all consumers and contractors to buy cement sacks from the producer directly without any restrictions, on condition that the Cement Producers Group also provide packed and unpacked cement for all emirates without discrimination. The MoU also requires factory representatives and producers to sign a commitment charter with regards to specific production quotas as dictated by the charter and annexed to the MoU, and which will be an integral part of the MoU. The agreement also includes specific mechanisms to monitor and follow up the execution of the MoU articles and the extent to which the factories should abide by them; these articles will be annexed to the MoU as part of the agreement. The representatives of the Cement Producers Group will designate a communication centre in each emirate to receive comments and suggestions from individual and corporate clients regarding the execution of the MoU, giving the group priority in selling cement to contractors and final users. Al-Mansouri emphasized that the signing of the MoU forms part of a series of initiatives and measures taken by the Ministry of Economy to contribute to the reduction of the inflation rate and the control of rising prices of various goods and services, to attain the broader goal of implementing the UAE strategy towards economic and social stability in the local market. He also emphasized that the MoU will contribute effectively to the stability of the local cement market by increasing production and reducing cement prices and eliminating monopoly and exploitation which negatively affect the local market and the UAE's commitment to a free economy. However, some individuals and companies attempted to take advantage of the huge demand for cement and other consumer goods influenced by the UAE's economic and construction boom, particularly by forming monopolies in the market and thus tarnishing the image of fair competition, he added. He stressed that the ministry will continue to combat all monopolistic activities which contradict the open nature of the national economy and negatively affect free-market principles. Al-Mansouri expects an increase in cement production capacity shortly due to the large expansions being carried out by cement companies and factories, which will pave the way for higher productivity and contribute to enhanced demand, leading eventually to market stability and price reduction. “This MoU is the result of the cooperation between the Ministry of Economy as a governmental party seeking the stability of food product prices within the UAE and protecting consumers by adopting various strategies and economic tools, and a group of cement producers representing the private sector in contributing to the development of the industrial sector in the UAE. We are aiming for the stability of prices in the national resale and wholesale markets and creating a higher level of competency away from illegal activities, in addition to highlighting safety and quality,” he said. Lauding the decision of Sheikh Mohammed Bin Rashid Al-Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, to exempt cement and iron from custom fees throughout the country's ports, Al-Mansouri said the decision reflects positively on the local market since it expands the coverage of exemptions to importers and as many contracting companies and ready-mix cement producers import materials directly from neighboring countries. __
