CAMBODIA’S abrupt ban on sand exports is hitting some local building material suppliers hard, but construction companies are expected to emerge relatively unscathed from the sudden embargo.
The country’s Prime Minister Hun Sen announced a total ban on the export of sand last Friday, citing the detrimental effect of sand dredging on the kingdom’s rivers and marine areas.
The move mirrors Indonesia’s 2007 overnight ban on sand exports, which caused a ’sand crisis’ in Singapore given its heavy reliance on sand for construction and land reclamation.
The ban saw raw material costs rocket on the back of a booming property market, pushing up concrete prices from $70 to $200 per cubic metre in the months after the ban. Sand is used along with granite to make concrete, which is used extensively in local construction.
At the time of the Indonesian ban, contractors faced huge losses, with fixed contracts forcing them to absorb the price increases. However, since the 2007 crisis, the building industry has diversified its sand supply lines, making the latest ban less likely to hit Singapore, say experts.
Dr Sujit Ghosh, president of the Ready Mixed Concrete Association, estimates that less than 20 per cent of Singapore’s current supply comes from Cambodia.
‘We’ve not seen a big impact as our sources now are quite diversified,’ said Dr Ghosh, who is also chief executive of cement firm Holcim Singapore.
In the aftermath of the Indonesian crisis, the Building and Construction Authority (BCA) relaxed rules to allow quarry dust to be used as a sand substitute. Quarry dust, imported from Malaysia and Indonesia, is a by-product of the production of concrete aggregates and created during the crushing of rocks, he added.
Such moves mean that building contractors here are likely to lose little sleep over Cambodia’s ban. When contacted, the BCA told The Straits Times that the construction industry no longer imported ‘concreting sand’ from Cambodia.
‘As for reclamation sand, we import it through private contractors who source from various countries, not just Cambodia. Hence, we do not expect this sand ban to have a major impact on our existing projects,’ added the BCA.
But sand suppliers are feeling the brunt of the ban.
Local sand supplier Anthony Seet, who declined to disclose the name of his company, told The Straits Times that the firm’s operations had to shut down overnight because most of its supplies were Cambodian.
Mr Seet, who entered the sand supply business following the 2007 Indonesian ban, when demand for the raw material was booming, added: ‘We won’t do anything illegal, so we’ve stopped our business. We’ll start looking for other sources soon.’
Ms Linda Teo, who works for another supplier, said it was business as usual given that her employer relied on various sources, including those based in Myanmar.
Recent reports in Cambodia’s Phnom Penh Post – which cite Thailand, Vietnam and Singapore as major destinations for Cambodia’s sand barges – claim that sand dredging frequently causes riverbanks and houses to collapse along the Mekong River and Tonle Bassac River.
Despite the ban, an official based in the south-western province of Koh Kong said companies were still dredging sand, but had postponed exports.
They were said to be waiting for government experts to assess the dredging sites for environmental damage.
However, local boatmen said ships were transporting sand for onward export regardless.
A spokesman from the Singapore Contractors Association told The Straits Times that contractors were still being offered supplies of sand from Cambodia.
The association does not expect an ‘immediate increase in prices as we are getting supply from various nearby countries’, it said.
Meanwhile, Indonesia’s Trade Ministry is reportedly re-thinking its continuing 2007 ban on the export of sand to Singapore.
TURNING TO OTHER SOURCES
‘We won’t do anything illegal, so we’ve stopped our business. We’ll start looking for other sources soon.’ – Local sand supplier Anthony See
Source : Straits Times – 14 May 2009