eBusiness Weekly
Oliver Kazunga
CEMENT imports into the country have more than doubled to 16 percent this year and the country’s leading cement producer, Pretoria Portland Cement (PPC) Zimbabwe says this is weighing its efforts to reach optimum capacity utilisation levels.
The company has an installed capacity of 1,4 million tonnes annually against a national demand of 1,3 million tonnes.
In an interview, PPC Zimbabwe managing director Mr Kelibone Masiyane said the level of cement imports into the country are worrisome as this restricts what they can produce for the market.
“If the market is saturated because we are bringing in imports, then it curtails our capacity utilisation.
“The cement that we should be making and selling locally and increasing our capacity utilisation, we are being affected by imports.
“We have seen some imports actually increasing and lately this year, they have gone to crazy levels where in the past there would be around seven to eight percent, but have more than doubled,” he said.
Mr Masiyane said together with other industry players they continue to lobby the Government to cease cement imports.
Lafarge, Sino, Livetouch and Pacstar are some of the cement producers in the country.
The imports, which are coming from neighbouring countries such as South Africa and Zambia, he said, largely involve some enterprising individuals and speculators while some of the cement is smuggled into Zimbabwe.
In 2017, PPC, which owns a clinker production plant in Colleen Bawn as well as a cement factory in Bulawayo, commissioned its second cement plant in Harare to augment output levels.
The two plants each have an installed capacity of 700 000 tonnes annually.
“As a company alone, before we start looking at competition from other players locally, we have got more than enough installed capacity to supply the entire country.
“There is no real reason for somebody to import cement from Zambia or South Africa,” said Masiyane.
“We have also been lobbying against imports because we are investing locally and when you invest, as an investor you expect a return from that investment.
“Like now we built that plant in Harare and commissioned it in early 2017, if you look at it from a capacity utilisation point of view, it’s still running at not optimal levels because we are getting imports coming in.”
He said cement on the local market is not competitive when compared to the region, because of the high cost of production and import duties being levied when importing critical spares for the factories.
“In some sense, we always say cement is a logistics business and logistics accounts for almost 40 percent of our costs.
“Now you can imagine, especially for PPC, in terms of geographical dispersion where we have Collen Bawn in Gwanda, we have the Bulawayo plant then we have in Harare another plant.
“When you compare to neighbouring countries, sometimes just moving a tonne, we are probably three or so times more than neighbouring countries.
The cost of electricity coupled with import duties and some of our spares are quite high compared to these other countries,” he said.
In Zambia, a 50kg bag of cement ranges between US$6 and US$6,45 while in South Africa it averages between R85 and R99.
A survey carried out by Business Weekly early this week established that a 50 kg bag of cement in Harare and Chitungwiza averages between US$9 and US$10,50.
Subdued local cement supplies
A hardware shop at Makoni Shopping Centre in Chitungwiza which sells imported and local cement brands was selling Lafarge-produced brands at US$10,20 while imported brand manufactured by Dangote was selling at US$10.
“Right now we don’t have cement from PPC; two weeks ago we placed an order at PPC but they couldn’t deliver and only yesterday I asked them to reimburse me my money and no reasons have been given as to why they can’t supply.
“We are importing the Dangote-produced cement from Zambia through the formal channel,” said a shop attendant who preferred not to be named.
It also emerged that some hardwares in Harare such as Mohamed Mussa and Bhola did not have cement from PPC.
The shop attendants who spoke on condition of anonymity said they have gone for at least two weeks without cement from PPC.
“We have run out of cement from PPC and it’s been more than two weeks without supply. We don’t even know when supplies from PPC will resume, we don’t know the reasons behind the short supply,” said one of the shop attendants at Mahomed Mussa hardware situated at Orr Street.
Contacted for comment, Industry and Commerce Minister Dr Sekai Nzenza said, “Lafarge is down but has started producing.
“We have allowed imports to fill in the gap. PPC is aware of this development and cannot meet the gap created by inability to supply by Lafarge.
“We discussed that issue when we visited them and they said had the breakdown been foreseen, they could have upped their production.”
“We are limiting imports. Apparently, it’s the northern areas that have been importing more than the southern part of the country,” she said.
