Garadagh Cement recognizes that the end user prices in the retail market during September October has risen to unacceptable levels. In this connection, Garadagh Cement would like to make the following clarifications, Trendreports.
In 2006, Garadagh Cement will supply around 1,300,000 tons to the domestic cement market. However, the total market demand for 2006 will be more than 2,600,000 tons. Therefore, Garadagh Cement alone can satisfy only a maximum 50% of the total cement demand in Azerbaijan. The balance of the required cement is supplied by other local producers (around 600,000), such as Azbentonit, AND, Mineral, Khirdalan, Altay-A, etc., as well as imported cement from Russia and Georgia.
Starting with the summer months, however, the level of imported cement was reduced drastically, due to a higher cement demand in Russia, in particular. Other local cement producers did not receive clinkers, for that same reason. In fact from August 2006, Garadagh Cement remained the only cement producer supplying constantly to the cement market in Azerbaijan.
As a result, the high domestic construction season (September & October), is suffering an extreme cement shortage, even if Garadagh Cement increased its dispatched volume compared to previous months.
The prices of Garadagh Cement products, including VAT, at the plant, are AZN85.55 / ton (so, AZN 4.28 / bag) for Garadagh Special bags and AZN69.45 / ton (so, AZN3.47 / bag) for Garadagh Optimal bags.
Garadagh Cement products arrive at the retail shops in Baku at the prices 4.58 AZN / bag for Garadagh Special bags and AZN3.77 / bag for Garadagh Optimal bags.
However, the responsibility to actually sell cement to end users in the retail market falls on the retailers. Therefore the current end users prices in the retail market are charged by the retail shops, which are doing a lot of speculation at expense of existing cement shortage.
Transportation tariffs from Garadagh to Baku area (as transportation tariffs are different to various destinations, function of distance) is, for both above bag products, AZN 5.93 / ton (so, AZN 0.3 / bag), including VAT.
Garadagh Cement has not increased their prices since February, and does not expect to increase them until the end of the year.
Being the only clinker and cement producer in Azerbaijan, Garadagh continuously increased the availability of its products to more customers, from 135 in 2003, up to almost 700 currently.
Garadagh supply cement to most of the ready mixed concrete plants in Azerbaijan, as well as to many construction companies. Garadagh is supporting all governmental projects related to refugees housing, schools, power plants, diagnostic centers, river banks reinforcement projects, infrastructure projects (bridges, airports, etc), and so on.