Sunday, August 20, 2017

Brick prices to keep rising after govt halts illegal firms

Workers stack bricks at a factory in Taikkyi in Yangon Region. Kaung Htet/ The Myanmar TimesWorkers stack bricks at a factory in Taikkyi in Yangon Region. Kaung Htet/ The Myanmar Times

Government attempts to crack down on illegal brickmakers at a major manufacturing region have curtailed rainy season production and pushed prices 20 percent higher than usual, wholesalers said last week.

A construction materials wholesaler and brickmaker based on the outskirts of Taikkyi, in Yangon Region, said a number of brickmakers would be shut down by the government because they did not have operating licences.

“We’re ready and willing to move out and stop this business, even though we’ve invested heavily in this industry. But we sent a letter of appeal to the township authorities in Taikkyi on September 6 asking them to reconsider,” he said.

The 33-year old businessman, who requested not to be named, said the authorities had not notified him where, or if, he would be allowed to restart his business in a letter he received on August 24. The letter gave a September 4 deadline for leaving the site. “Taikkyi authorities informed us via a letter on August 24 that we must move out by September 4.

Since that letter arrived our business has been seriously affected and I’m very worried about the future because we employ about 60 people here,” he said. He said the order to halt many brick-making operations in Taikkyi was to prevent environmental degradation.

“We have not yet decided where we will move to, nor do we know where we’ll be allowed to go. As far as we know, we’re being moved because the government wants to protect farm land,” he said on September 9.

He said brickmakers need a minimum of 1.5 acres of land to adequately run their operations, adding that his plot in Taikkyi is 3 acres. “We were not totally aware that we had to apply for licences.

This is a traditional business and there was always lots of land here,” he said, adding that about half of the 45 brickmakers in the area did not have licences. The licences must be renewed every year and be obtained through the Ministry of Agriculture and Irrigation since the brick-making takes place on agricultural land.

“Rainy season is very costly for us in labour expenses – it’s about twice as expensive to operate at this time of year as during the summer months. And it takes almost twice as long to make the bricks, which is why they are more expensive for consumers as well,” he said.

Wholesalers at Mingalar Taung Nyunt township said brick prices always rise at this time of year because the rains slow production. But he said the rise this year is larger than in years past, partly as a result of the impending closure of brickmaking factories in Taikkyi.

“As far as I know the reason for price jump is the crackdown on illegal brickmakers, which is cutting supply. During the past month, brick prices have climbed by at least K15 each, or about 20pc,” said Ko Kyaw Zin Oo, the owner of Chan Myay Aung bricks, sand and gravel shop in Mingalar Taung Nyunt township He added that the Taikkyi area is an important supplier for Yangon and the reduced production could potentially affect the city’s construction industry.

“The [Taikkyi] brickmaking industry supplies a lot of Yangon’s brick demand. “A price rise of K10 a brick is actually very large and will increase costs for builders,” he said, adding that prices had not yet peaked and predicted that costs might increase by K10 or K15 a brick in coming weeks.

Ko Than Aung, a sales representative for Daw Ngwe Win and Sons construction materials shop in Mingalar Taung Nyunt township, confirmed that prices have jumped in recent months. “Brick prices are very high at the moment – between K95 and K100 each,” he said.

A Taikkyi township official said authorities in northern districts of Yangon Region had been instructed to crack down on any illegal businesses found to be damaging farming land. “Those business owners should not be using farming land to bake bricks because it destroys the land,” the official said.

“Many brickmakers in this area have applied to run businesses other than brick-making on their land. Many do run other businesses too but also make bricks,” he said. “This area has fertile land and it’s not appropriate to use this land to make bricks – it should be used for agriculture,” he said.

He added that the crackdown would also encourage businesspeople to act honestly and apply for the appropriate operating licences.

“We wanted to stop these illegal operations by September 4 and make sure that brickmakers don’t act unlawfully again,” he said.

The official added that the crackdown on illegal brickmakers would later be extended to other areas such as Hmawbi, Shwe Pyi Tha and Hlegu on the outskirts of Yangon to prevent the destruction of farm land through erosion.