Workers at the Shwe Myittar construction materials shop load bags of Elephant Brand cement onto a truck in Sawbwagyi Gone, Insein township, Yangon.

INCREASED activity in the construction industry in 2007 has led to higher sales of base materials like concrete and bricks, but market sources say recent fuel price hikes have largely erased these gains.

Prices increased for construction materials like cement, sand and pebbles last month, as they often do at this time of year when the supply of some products declines. However, increased transport costs have countered these increases.

One basic product that suffers from a supply shortage at this time of year is bricks. U Than Aung, manager of a Daw Ngwe Win and Sons construction materials shop in Mingalar Taung Nyunt township, says sales and prices of bricks have increased this year.

He says brick prices have increased by about K8 from last month alone and K20 from last year. But that has not hurt demand for them.

“This year I’ve been selling about 25,000 bricks a week, which is much better than last year when I’d only sell 12,000 a week. Sales have certainly increased but the market’s still not that active,” U Than Aung says, adding that it has seen better days.

“I’ve been running my business since 1990 and in 2002 and 2003 business was at its peak because the construction industry was very busy,” he says, adding that brick sales in that period were closer to 50,000 a week.

U Than Aung says there are five main brick makers in the market. The most popular style is the eight-hole brick that costs K60 and is made at Taik Kyi township, Yangon Division. Following this is a K57 brick produced at Laydauntkan township in Bago Division. There is also a government factory, which he says is not popular with buyers, for the simple reason that its bricks cost K75, which adds up when building a house.

“Most developers prefer using the K60 bricks because the price is reasonable and the quality is good. Brick prices always increase at this time of the year because producers struggle to bake their bricks during the rainy season, so sellers must rely on their stockpiles,” he says.

Construction material wholesalers say the price of cement has also increased by about 20 percent over last year, largely because transport costs from Thailand, which supplies 40pc of the cement in the market, have been higher.

Elephant brand cement, imported from Thailand, is the most sought-after cement and costs K6200 a bag, while locally made Kyant cement is K5800 a bag.

“Cement prices increased about K500 this month for each brand but sales are still pretty normal. I think prices have increased because many construction sites take a break during rainy season,” says U Mya Lwin, owner of Aung construction materials shop at Sawbwargyi Gone, Insein township.

He says the shop has sold about 500 bags of cement during this rainy season, compared to 750 bags before rainy season, adding that sales would probably return to normal toward the end of the year when the rains stop.

Another important construction material is sand, for which prices also have increased since last month.

The current price of sand is K4500 for 100 cubic feet; an increase of K1000 over last month. Sand sold locally is taken from Thanlyin township.

U Mya Lwin says several sand traders have tried to export to Singapore but the sand was not up to Singapore’s stringent standards.

“Whatever happened with that deal is unimportant and we have kept our focus on supplying the local market. I’ve been running this business for about 12 years and business is good.

“If the construction business is good, our business is good too,” he says.
A higher price has also been noted for pebbles, which are mixed with sand and concrete in the construction process. Prices have increased to K43,000 for 100 cubic feet this month, compared with K38,000 last month.

While the rainy season may have affected the construction business by halting work at many sites, those in interior decoration are enjoying a busy period.
Sales of interior decoration materials have increased in the last month in line with growing apartment sales, says U Maung Maung Htun, managing director of Myanmar Thit Sar Co Ltd.

“Sales on a range of products have increased by about 50pc from last month, and have been rising since June. Our most popular item is tile,” he says.

As with cement, imports form a large percentage of the market; tiles imported from Thailand and China occupy about 70pc of the total market share, according to U Maung Maung Htun.

U Myint Lwin, owner of Lwin Interior Decoration Materials, says people prefer using imported tiles because they last longer and come in more designs.
“Our current sales have increased by about 30pc from this time last year,” he says.

Another sought-after item in the interior decoration market is ceiling boards.
Plaster ceiling boards imported from Singapore are K5800 a sheet (24-square-foot), while locally made plaster ceiling boards are K5200. Local people prefer using plaster boards made in Myanmar because they are cheaper.

An industry source said sales of the boards have increased about 50pc from last year.