Uganda: cement price expected to drop with new plant

Uganda: cement price expected to drop with new plant
Published: 10 January 2011

Cement prices are expected to drop following the commissioning of a new plant by Hima Cement. The factory in Kasese District is expected to boost the construction industry with an expected drop in the price of cement as a result of increased production.

In the later part of December 2010, cement in Uganda witnessed a volatile price trend forcing a retail price of KES26,500 (US$326).

Mr Hussein Mansi, the local Lafrage representative, said the KES280bn (US$3.4bn) plant will not only increase supply for the local and regional markets, but will also see prices become more competitive, especially if the government continues to lend support to local investors against an influx of cheap imports.

Mr David Njoroge, the general manager of Hima Cement, said with the plant already in operation, the impact of increased production from a previous capacity of 350,000t a year to 850,000t is already showing some benefits to Ugandans.

He said: "With a daily average of 500,000 bags, the price of cement has already dropped from a high of about KES30,000 to about KES26,000."

"This is a good start, and as other factors that increase the cost of production get sorted, it will not be long before prices further drop."

However, despite the increase of cement production, observers say prices must further drop in order to genuinely develop the construction.

While opening the plant, President Museveni promised to engage regional leaders on the Common External Tariff, after Mr Mansi cited it as a move that will increase regional competitiveness.