Dubai: While local companies are anticipating a rise in building materials costs over the next year, their counterparts in Iran are already experiencing a hike of up to 30 per cent under the pressure of trade sanctions.
Cement prices have increased by 20 to 30 per cent in Iran this year compared to the year before, said Ramezan Ahmadi, a representative of Sepahan Cement at the Big 5 exhibition.
“It’s because of energy, transport and supply costs but most of all because of the sanctions. Our suppliers are not selling at the same prices as before,” he said.
The currency exchange rate has also made imports into Iran four times as expensive, said Abol Hassan Raminfar, manager of the Iran Construction Clinic that sells chemical building products.
“We came to the Big 5 to find new markets. We joined with a German company to gain access to more markets because its cheaper to manufacture in Iran than in Europe,” he said.
Local companies are already seeing costs rise in European imports, they said.
Building components such as roof tiles imported from Europe have recently witnessed a steady rise that is only padded slightly by the comparatively lower exchange rate between the Euro and Dirham, said Ashokan Menon, assistant sales manager of the building materials division with Al Fajer establishment. It imports roof tiles from Italy, Spain and Portugal, terra cotta from Spain and ceramics from Spain and Italy.
“We could see building material prices go up when projects start to pick up in the UAE. Maybe a 5 to 10 per cent increase,” he said.
Other companies involved in building materials are not so optimistic about the market because of funding problems.
“Now the prices are low because in Dubai there are delays in payments to the contractors. The market is down,” said Farhan Iqbal, business development co-ordinator with Al Rama International Traders, a steel trading company.
“We are crossing our fingers that the market will go up,” he said. “We predict that in March 2013 there will be a rise in steel prices with the construction projects in Saudi Arabia and World Cup projects in Qatar.”