Sri Lanka’s construction sector crippled by cement shortage amid forex crisis
The construction industry, the biggest contributor to the gross domestic product in Sri Lanka, is threatened by the shortage of cement, and now builders have urged authorities to resolve their issues
The construction industry, the biggest contributor to the gross domestic product in Sri Lanka, is threatened by the shortage of cement, and now builders have urged authorities to resolve their issues. The industry is the biggest job-generating sector in the island country.
For over a year now, the country has been facing a severe foreign exchange crisis, which prompted the government to put strict import control measures. The industry is also struggling to import raw materials required for the production of cement locally.
The Ceylon Institute of Builders (CIB) has now requested the Central Bank of Sri Lanka for swift solutions.
“We require local production of approximately 8.8 million tons, and presently, we can’t release this because LCs cannot be opened to import raw materials,” CIB Chairman Rohan Karunaratne was quoted as saying by Daily FT.
“Further, there is no stable selling price for cement. Although a fixed rate has been indicated in the range of 1,300, this is not our reality,” he added.
The sector has been struggling for two years now. However, since last year local production stepped up to mitigate import restrictions. But the sustaining this growth in local production will require an unhindered supply of raw materials.
Banks, gripped by the forex crisis, are unable to issue lines of credit.
Prices are dangerously volatile, Karunaratne said, adding the issue of such abnormal prices is overshadowed by the larger issue that cement (at any price) is markedly unavailable. “Therefore, the Central Bank should offer an appropriate solution for banks to open up LCs for raw material importers of cement,” he added.
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