(Trinidad Guardian) University of the West Indies economist, Dr Vaalmikki Arjoon, says Trinidad Cement Ltd’s (TCL) impending cement price hike of 7 per cent from February 17, underscores the need for a robust competition policy to protect consumers from unfair price increases, highlighting the need for at least one other local cement provider capable of competing with TCL.
In an interview with Guardian Media on Friday, Arjoon said this pricing strategy is typical of a monopoly, where the supply and price of cement are controlled by a single supplier, TCL.
“As the sole supplier, higher prices allow TCL to maintain and increase its profit margins, given that demand for cement will continue to be high due to its essential role in construction and
infrastructure. The recently announced 7 per cent price hike follows a series of annual increases since 2021, further elevating construction costs for developers, contractors and individual builders,” Arjoon said.
He also noted that even though the duty on hydraulic cement imports was reduced from 20 per cent to 10 per cent last year and import quotas were lifted, the market remains uncompetitive, noting that conditions for fostering competition are still lacking, with potential importers facing challenges in accessing adequate foreign exchange.
Ultimately, Arjoon said, these added costs are passed on to consumers in the form of higher prices for new residential and commercial properties, whether still under construction or yet to be built.
“Such cost increases especially worsen affordability for first-time homebuyers at lower- and middle-income levels, as well as for current homeowners planning renovations,” he said.
In addition, Arjoon said new units entering the market are likely to carry elevated rental prices to recoup expenses. In the short term, finished properties already on the market may not see an immediate price change as they will be unaffected by the impending hike in cement prices. However, as buyers perceive these existing units to be comparatively cheaper, their demand—and thus prices—could rise.
Further, he warned that continued price hikes may render smaller residential developments less profitable or delay them altogether, with developers facing narrower profit margins or needing more financing to cover ballooning material costs.
Arjoon also noted that Government-funded projects—roads, bridges, schools, hospitals and similar initiatives—will also become more expensive to complete, leading to cost overruns, increased borrowing, project postponements, and, ultimately, a larger fiscal deficit.
Guardian Media was told by an official at the Trinidad Cement Ltd (TCL) on Wednesday that cement will increase by seven per cent, beginning with bagged cement.
TCL’s bagged products—such as Premium Plus, Eco Cement and Plasta Masta—are expected to be increased on February 17. That is almost a year to the day since it was last increased, TCL confirmed on Wednesday, while the increase in bulk cement will take effect from March 5.
