MUSCAT : Oman should encourage greater competition in its cement market and explore domestic alternatives to imported industrial supplies to limit the impact of rising production costs, economist Mohammed Al Kindi said in an interview with The Arabian Stories.

Higher shipping charges, delays in deliveries and increased costs for some raw materials and spare parts were putting pressure on manufacturers, he said, linking the increases to international market conditions and geopolitical disruptions.

Although cement is produced locally, factories still depend on imported materials and equipment for parts of their operations. That leaves them exposed to supply chain pressures beyond Oman’s borders, Al Kindi said.

He urged policymakers and businesses to focus on reducing those vulnerabilities rather than addressing price increases only when disruptions occur.

The consequences could extend beyond cement to other construction products, including tiles and interlocking paving blocks, he said. Suppliers using cement as an input could face higher costs, while changes in the price of a basic material might encourage other businesses to review their pricing.

Al Kindi said continued monitoring by the Consumer Protection Authority would be important in balancing legitimate increases in production costs with consumer interests.

However, oversight should be accompanied by an assessment of the market’s capacity to accommodate more cement producers and suppliers, he added.

Imported raw materials and spare parts availability

Greater competition could give buyers more options and help contain the extent to which higher costs are passed on to them.

Another priority should be identifying imported raw materials and spare parts that could be manufactured in Oman, Al Kindi said. Developing domestic alternatives could strengthen supply security and help producers maintain profitability without repeatedly raising prices.

Long-term approach

He said any response needed to balance the interests of listed cement companies and their shareholders with those of homeowners and developers buying construction materials.

Despite the pressure on cement prices, Al Kindi did not expect the increase alone to trigger an immediate rise in the selling prices of homes built by property developers.

Some developers had sufficient margins and access to comparatively lower-cost land to absorb part of the additional expense, he said. Competition also limited their ability to increase prices without losing buyers to other projects.

Al Kindi called for a longer-term approach combining stronger competition, domestic manufacturing and more efficient use of materials to make Oman’s construction supply chains less vulnerable to future disruptions.

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