Due to the Cement Tariff, Real Estate Prices Will Rise and Construction Quality Will Decline

According to leaders of construction companies, the establishment of a 22,000 dram tariff for each ton of imported cement will lead to a decrease in the quality of construction and an increase in real estate prices. This was discussed at a meeting on the situation surrounding the cement bill, organized by the Center for Economic Development Initiatives.

Aram Khachatryan, head of "Arni Trade" company, stated that imported Iranian cement is sold at a lower price and is of better quality.

“Recently, local producers have intensified their lobbying, claiming they are at an unequal disadvantage, which is not correct. On the contrary, last year, 25% was imported while 75% was produced by local manufacturers. The volume of local producers has increased compared to 2015 and 2016. Local producers claim the cost price is 35,000-36,000 drams, which does not reflect reality. If studied, it will become clear that the cost price of local producers does not exceed 17,000-18,000 drams. Local producers have made super-profits for years; now that it has been reduced by 10,000 drams, they still have room,” said Khachatryan.

Armen Sakapetoyan, a representative of the construction company "Estate Investment and Development," also emphasized that the introduction of the tariff will increase the cost of construction for construction organizations. According to him, the tariff on imported cement will also reduce the attractiveness of investing in the construction sector.

“We have local production, which was previously sold for 50,000 drams, today it is 40,000 drams, and we have an alternative—the imported cement. In reality, Iranian cement has been more affordable and of better quality. The price of Iranian cement has always been a restraining factor for local market producers, meaning it has served as competition. By setting a tariff of 22,000 drams, increasing the price of cement in this way will simply close the last window for ensuring competition,” he noted.

According to the representatives of construction companies, local producers should be encouraged, but this should not be done at the expense of imposing tariffs on imports.