Pehin Orang Kaya Seri Utama Dato Seri Setia Awang Haji Yahya bin Begawan Mudim Dato Paduka Hj Bakar said this before officiating the 32nd Asean Federation of Cement Manufacturers (AFCM) Council Meeting.
The minister sees AFCM as a platform for its members to share important information on trade matters as well as updated statistics on supply and demand of various types of cement products, imports and exports, design capacity and production figures of cement plants in each Asean country that would help to shed light on the cement industry in the region.
He also noted that it was more critical and a challenging time for AFCM's leadership and its members to work out creative measures and strategies for its collective and mutual benefits.
"I am confident that the AFCM and its constituent members through the excellent work and join effort that have been generated through the years will be successful in meeting their objectives which should include accelerating and harmonising the growth and progress of the cement industry in the region through these challenging times," the minister said.
The Managing Director of Butra HeidelbergCement Sdn Bhd, Jean-Glaude Jamar, in his welcome address said the financial crisis that started off in the US has now translated into a world economic crisis with many countries facing recession.
"The speed of change was amazing and unprecedented, in less than two months the whole world economy went from boom to bust," he added.
He said it came like a bullet train and caught most people by surprise. In the backdrop of this world crisis, the Asean cement industry is not spared and it now faces major challenges.
"Most of us already feel the pinch of a much lower market demand, negative growth and reduced volume," Jamar said.
He said even though the fuel price has come down substantially, the Asean cement industry is still experiencing coal price fair above its level seen in 2007 and during the first half of 2008. Coal is the main source of energy for producing cement. As a result, the cement industry is hit from both sides.
According to Jamar, on one hand the cost of production has increased substantially and on the other, the demand and volumes on the domestic market are now expected to reduce considerably.
"The capacity gap will thus increase and it could very well revive the appetite for major producing countries to increase their export volume, even at marginal cost. This, in turn, could further damage the local cement producers. So the challenge is real and need to be addressed," he said.
President of Asean Federation of Cement Manufacturer, Dr Ernesto Ordonez, in his opening address said the council meeting will provide the much needed opportunity to "revitalise the foundation of our Asean cooperation and boost our industry's capability to face these troubled times".
He also said in the Asean arena, AFCM has to promote and sustain Asean cooperation and effectively address the prevailing low cement demand without energies and vision focused on long-term goals.
"The role of AFCM is enhanced as we now boost our commitment to sustainable development. In doing so, we will undoubtedly be able to meet not only the requirements of people living today but also strengthen the ability of future generations to meet their own needs," Dr Ordonez continued to note in his address.
The two-day meeting is attended by representatives of cement manufacturers of Asean countries.
During the gathering, the members will discuss topic areas such as market information; assessing the risk cement manufacturers face when China goes into under capacity utilisation situation; whether cement should be given preferential tariff treatment; measures to address the high cost of coal; strategies for promoting and increasing cement usage through seminars, studies, activities and such; AFCM's commitment to CO2 reduction and sustainable development; and ACFM's commitment or initiatives for reduction of accidents and accidents with contractors.
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