Ssangyong C&E Agrees with Ready-Mix Concrete Industry on 15% Cement Price Increase

Kiln and cement manufacturing equipment at Ssangyong C&E Donghae Plant. [Photo by Ssangyong C&E]

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[Asia Economy Reporter Kim Jong-hwa] Ssangyong C&E announced on the 17th that it has agreed with the Korea Ready-Mixed Concrete Industry Cooperative Federation to supply Type 1 cement at a price increased from the previous 78,800 KRW per ton to 90,800 KRW per ton, and slag cement at a price increased from 71,900 KRW to 83,000 KRW.

Although this increase is lower than the amount Ssangyong C&E initially requested, it appears to have been accepted as a measure of sharing the burden with the ready-mixed concrete industry, which is facing difficult business conditions. The agreed prices will be applied starting from shipments in April.

Ssangyong C&E had proposed an 18% price increase to 93,000 KRW per ton from February shipments to the ready-mixed concrete industry in January, due to the sharp rise in the price of bituminous coal, which accounts for 40% of manufacturing costs, and the increased cost burden caused by shortages in the supply of urea solution needed for the production process.

A Ssangyong C&E official said, "There were concerns that this price increase would be far from sufficient to offset the burden of rising manufacturing costs due to the recent surge in raw material prices such as bituminous coal, and that there would be limits to overcoming the management crisis. However, the cement and ready-mixed concrete industries agreed to share the pain together and to seek continuous mutual growth in the future."

As Ssangyong C&E, the leading company in the cement industry, concludes price negotiations with the ready-mixed concrete industry, it is expected to influence negotiations with other cement companies as well. A cement industry official said, "Since each company has a different cost structure, it is uncertain whether other companies will accept prices lower than their requested increases like Ssangyong C&E did. However, since they are competitors, other companies are likely to conclude negotiations at an appropriate level."

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