East Africa: cement industry left out in budget

East Africa: cement industry left out in budget
Published: 14 June 2010

Speaking during the East Africa Cement Producers Association (EACPA) annual meeting in Kampala last Friday, producers said the high production costs and inadequate protection from cheap imported cement has made it increasingly difficult for the industry to compete.
 
Local press at the Daily Monitor reported that the cost of power in East Africa is more than four times that of Pakistan and China where the imported cheap cement is said to come from. EACPA had asked the EAC governments to restore cement to the sensitive product status, which would restore the Common External Tariff (CET) to 35 per cent or KES100, 000 (US$50), to limit importation and consumption of imported cement.
 
Mr David Njoroge, the EACPA Uganda chairman, said: “The governments have decided to continue with the 25 per cent, a low CET which, does not protect us, as they conduct a study to prove whether we have the capacity to produce and satisfy the market demand.”
 
“Delaying the study is not our mistake; they would have increased the tariff as they carry out the study. When they find that we don’t have the capacity, they can reduce it. But am sure we can satisfy the demand,” he added. “We are not asking for protection, all we want is for the governments to provide us with a level playing field because as manufacturers we can only control some of our production costs, but not the bigger costs like power, transport and other infrastructure, which are largely the domain of the EAC governments,” Mr Harpreet Duggal, EACPA Secretary said. The minister of Finance Mr Syda Bbumba told Daily Monitor on phone: “We don’t take whatever they propose, we sat and agreed as ministers of finance from the five partner states to maintain the tariff.”
 
EACPA Tanzania Chapter Chairman Mbuvi Ngunze said the cement manufacturing sector in the region is faced with imminent plant closures and job loss as a result of increasing dumping of cheap and subsidised cement mainly from Asia. In the Uganda industry for instance, there have been numerous strikes at Tororo Cement industry, an indication of staff dissatisfaction.
 
The association had also sought for the governments to invoke additional anti dumping duties in consultation with the industry and institute to correct valuation of imports for assessment. “The EAC governments encouraged us to invest in new capacity to meet domestic shortfall and we jointly invested Shs2.2 trillion to grow production from 6.4 to 10Mt. We now have enough capacity to meet local demand and export to emerging markets in the region,” Mr Mbuvi said.
 
Source: Daily Monitor