THE CHAIRMAN of the Cyprus Cement Company in Moni, George Galatariotis, said yesterday a temporary shortage in cement would soon be overcome, but warned of serious problems in the new year due to the massive boom in the building industry.
Speaking to the Cyprus Mail, Galatariotis confirmed that maintenance and repair work at the island’s two cement factories, as well as a sudden increase in demand, had in the last three weeks created a shortage in supply, but assured the factories were now fully operational and that the shortage would be dealt with within the next week.
“The sudden increase in demand for cement from the construction industry in the past few months has caught us by surprise,” he said.
The increase in demand is due to the massive infrastructure projects carried out by the government and to the huge increase in the construction of homes and apartment blocks for foreigners, especially in Paphos and Limassol.
Galatariotis said the surge in demand took place at a time when his factory at Moni had been shut down in order for dust filters to come into line with EU standards.
“These factors and the fact that Vassiliko had to undergo repairs on its machinery led to the shortage in cement,” he said.
“But now both cement factories are working normally and the shortage is being dealt with. By next week, we expect there will be no more shortage.”
But Galatariotis said the boom in the construction sector could lead to a shortage in 2004, saying the factories would not be able to deal with the huge increase in orders.
“Both factories are producing the maximum they can produce,” he said.
“If demand is higher than what we can produce, then obviously there will be a problem, and I anticipate there will be a problem next year.
“The orders in 2004 have increased so much compared to this year that I can safely say there will be a shortage in 2004, which can only be covered by importing bagged cement,” he added.
Galatariotis said that if the government lifted import duties on cement in order to conform to the common external tariffs of the EU before May 1, bagged cement could be imported to cover the shortages.
“You don’t need infrastructure at the ports to import bagged cement, like with bulk cement, but if we were to import in bulk we would need millions to build the proper infrastructure at the ports.
“If the government were to lift all the import duties on cement imports, then people would be able to import bagged cement and that would solve the shortage on the island because the cement factories would then only deal in bulk.”
Galatariotis said that although importing bagged cement would be of no benefit to cement factories, as it would be cheaper than locally-packaged cement, it would help solve the shortage.
Import duties on the CIF price of cement and clinker are 47 per cent from non-EU countries and 26 per cent from member states, but Galatariotis said there was no surplus cement available in the EU.
“You can only find clinker and cement from non-EU countries like Turkey which has a huge surplus, or Lebanon and Egypt,” he said.
“These countries can sell us cement at very low prices.”
The Commerce Ministry yesterday confirmed Galatariotis’ fears, saying the island was facing a huge shortage problem.
“It looks like there is a huge demand for infrastructure in this period. There are road projects for this year that led to a massive increase in demand for cement,” an official said.
“This has even led to quarrels breaking out outside cement factories between drivers because the two factories simply can’t cope with the demand.”
The official said the government was studying the suggestion to scrap import duties before accession.
“Unless we scrap the duties, we will be faced with a serious shortage in the first six months of 2004,” he said.
“But the government is looking into the matter, the minister is informed and we are dealing with it.”
