Tanzania: prices stabilise as cement comes back online

Tanzania: prices stabilise as cement comes back online
Published: 19 October 2011

Cement supply and prices at the retail market in the city have stabilised after a major producer resumed full production. One of the Tanzania Portland Cement Company plants developed mechanical problems early last week and sent prices of the commodity skyrocketing.

Cement prices increased in Dar es Salaam by about KES2000 (US$20) per a 50kg bag last. Various outlets sold cement bags at between KES15,000-15,500 (US$150.2- 155.2) from KES13,000 (US$130) a week before.

The situation no appears back to normal. Twiga Cement managing director, Pascal Lesoinne said the company fixed the mechanical fault and restored its 25,000t production.“We experienced the problem in the last two weeks, but until end of last week we had already rectified the fault and resumed to our weekly production capacity of 25,000t,” he said.

Supplies have started to reach the market again in healthy volumes.  “We have started receiving the consignments from the orders that we pressed to the plant (TPCC)…we are now selling it at KES13,000,” Johnson Kisoki, a trader at Buguruni, a city suburb said. TPCC management said the plant was repaired and resumed production in the weekend.

He added that he believes prices rises was caused by profiteering by unscrupulous traders rather than by actual traders.

TPCC also known as Twiga Cement, which produces 25,000t weekly, supplies more than 60 per cent of cement to Dar es Salaam and neighbouring regions. Currently, its production covers approximately 40 per cent of domestic demand with the rest being covered by the remaining two factories, which are in Tanga and Mbeya. Tanzania’s cement industry has a total output of 3Mt against the country’s annual demand of 2.1Mt. But ongoing power shortages barely enables domestic producers to attain fully capacity production.

Due to the shortage of the cement in the recent years, East Africa Community finance ministers reduced Common External Tariff (CET) on cement from 40 per cent to 25 per cent, causing influx of cheap imported cement.Builders are increasingly resorting to imported cement from Pakistan and other Asian countries due to its affordability and it is reportedly to capture about 10 per cent of the local market.

However, the manufacturers have been complaining to the government for not reinstating the import duty even after the increased production capacity, to render them a level playing field as they grapple with increased competition.