Zimbabwe production expected to rise

Zimbabwe production expected to rise
Published: 01 October 2010

Cement production is expected to increase by 29.8 per cent this year on the back of optimism that the construction industry will grow marginally this year.



In an interview with Herald business Lafarge managing director Mr Johnathan Shonhiwa said production for the whole cement industry was expected to increase from the current 400,000t to 570,000t. 



"In terms of domestic demand as Lafarge we expect the numbers to increase by over 46 per cent compared to last year," he said.

Mr Shonhiwa said the 570,000t was achievable given that there is a lot of activities in the construction industry and also taking into account the improvements in the mining and agriculture sector. 



"This target is very achievable because there is a lot of activity in the residential housing market however, the commercial industry is still facing some challenges due to lack of funds as a result of the economic downturn of the last decade but it is promising to rise soon.



"Lafarge is very excited about the developments in the mining and agriculture sectors that are now sustaining local production, which will see a boost in the construction industry," he said. 



Lafarge has been recording a decline in export production because the market has not being active. 

The company used to export to DRC and Zambia but due to the recession DRC has not been active and Zambia has a new cement plant that is serving that market. 

Mr Shonhiwa said they were only exporting Malawi though some other players in Zimbabwe have contracts with DRC, Botswana and the southern part of Zambia. 



He said prices had remained the same despite last year’s shortages.

Lafarge is facing some challenges that are affecting their production capacity with the major one being power cuts.



"We are happy that after engaging with Zesa we have come up with some kind time frame which will see us having reliable power," he said. 

Apart from electricity other challenges being faced include high cost of raw materials. 

In his mid-term fiscal policy review statement, Finance Minister Tendai Biti admitted that construction is a measure of real economic activity and any flourishing economy is noticeable by the rate of construction activity going on. 



"The industry has strong forward and backward demand linkages with the rest of the economy and promotes strong multiplier effect in the economy," he said.



The minister also noted that viability challenges in a highly unstable macro-economic environment were at the centre of the industry’s free fall in the last decade. 

Between 2000 and 2008 the sector persistently declined by a cumulative 125 per cent and this explains the dire situation the industry faces. 

The finance minister noted that the strong demand for inputs such as cement and other building materials, steel and electrical products and roofing material among others, would stimulate production and create jobs in other sectors.