Cameroon: Cimencam welcomes competition

Cameroon: Cimencam welcomes competition
Published: 04 December 2007

Les Cimenteries du Cameroun, CIMENCAM, has welcomed government’s decision to liberalise the importation of cement.

The Minister of Commerce, Luc Magloire Mbarga, had November 22 signed a communique announcing government’s decision to liberalise the importation and distribution of cement, "for the interest of consumers".

Although many observers saw the announcement as a big blow to CIMENCAM, its General Manager, GM, Jean Pierre Le Boulicaut, told reporters November 23 in Douala that he had never liked the idea that his company had no competitor.

CIMENCAM has been managed by the multinational French-led company, Lafarge Group, since 1996.The government decision came on the heels of a suspension of a wrangle between the management of CIMENCAM and the Ministry of Commerce over a controversial price increase by the former.

Last October 9, CIMENCAM had increased the wholesale price of cement by seven percent a ton. The Minister of Commerce had rejected the price increase, noting that the CIMENCAM had not contacted the government. Later, both parties settled on five percent which went into effect on November 5.

The CIMENCAM GM tried to downplay the impact of the liberalisation on his company. He said before coming to CIMENCAM, he had served as the General Manager of Lafarge Group in Turkey where he boasted the company faced 14 competitors in the cement sector.

He said they were still able to do very well in the market because of the group’s reputation for quality products. Thus, he said even if there were a dozen companies to compete with that would not bother them.
Noting paradoxically that the government decision to liberalise the importation and distribution of cement is unwise, Le Boulicaut advised that if the investors were to open factories like CIMENCAM, Cameroon would benefit from the creation of jobs, the payment of taxes and the industrialisation of the country and so on.

But he opined that in a situation where economic operators in the sector are mostly involved only in importation, the country is reduced to a mere market and not a producer. Le Boulicaut as well noted that CIMENCAM also has the authorisation to import cement and has done so several times to meet up with local demand.

He stated that Lafarge Group operates in 11 African countries and a total of 70 countries across the world, and that CIMENCAM can import cement from any of the affiliated companies.

Le Boulicaut also explained that for the same reason, CIMENCAM will not be much affected if the CEMAC region signs the convention with the European Union, EU, to scrap customs duty from January 1, 2008.

He said CIMENCAM would also be able to import duty-free, products from companies that are affiliated to the Lafarge Group in EU member countries.

Price Increase
The General Manager of CIMENCAM confirmed reports that his company would increase the price of cement next year. He said the cost of raw materials such as limestone as well as the cost of transportation by sea have been rising steadily. He said there have also been increases in taxes and salaries among other things.

Le Boulicaut claimed that in the last three years, the cost of production at CIMENCAM has moved up from FCFA 49,000 for a ton of cement, to FCFA 69,000, while their price had remained unchanged.
He regretted that the government rejected their seven percent increase in price which was imperative to meet up with the increasing cost of production.

No Fixed Price
According to the new prices following the five percent increase, at the Bonaberi factory in Douala cement is sold at FCFA 85,780 for a ton (20 bags), or FCFA 4,289 a bag. At the Yaounde depot, the wholesale price is FCFA 99,200 for a ton or FCA 4,960 for a bag. At Kye-Ossi Depot in the South Province like at Garoua-Boulai in the East Province, cement costs FCFA 129,800 or FCFA 6,940 a bag.

The CIMENCAM GM blamed some local wholesalers for smuggling cement meant for the local market to some neighbouring countries where the price of cement produced by the company is relatively higher.