Cameroon: will trade liberalisation improve the market?

Cameroon: will trade liberalisation improve the market?
Published: 27 November 2007

A number of prospective cement traders are expected to converge in Yaounde, the capital of the Cameroons today when the Minister of Trade, Luc Magloire Mbarga Atangana is expected to discuss the signing of a ministerial order last Friday liberalising the importation and marketing of the product - reports The Cameroon Tribune.

"In a bid to create more competition on the local cement market for the benefit of the consumer, government has decided to liberalise the importation and marketing of the product", Luc Magloire Mbarga Atangana
announced, inviting Cameroonian companies to seize the moment and enter these new markets at the national and sub-regional levels.

Cimenterie du Cameroun-CIMENCAM, a Lafarge subsidiary, and the country’s only producer has produced and marketed cement for the past 30 years, through a well defined network of 17 depots, more than 200 distributors and two factories – in effect a virtual monopoly – and with ex-works prices now
put at US$160 per tonne, quite a rewarding one.

However with rising demand and shortages, CIMENCAM has also not been able to supply as much cement as demanded by consumers with production noted at 106,500t in June against a national demand estimated at more than double such outputs.

Other companies have tried to enter the Cameroon market but with little or no success. Recently, a Singapre/Korean company had attempted to open up a grinding plant. Earlier another start-up AFCO had shipped in several scores of containers, reportedly containing the makings of a second-hand cement
plant, but this project was also soon abandoned.

CIMENCAM spokesmen said they had also intended to import cement to alleviate the present shortages but long delays in the port of Douala aggravated by customs bureaucracy meant that seven to eight weeks were currently needed to clear imported cement.

In the light of the above comments, the path to trade liberalisation will not be easy, with CIMENCAM likely to continue to exert its dominance, even with current government pressures prevailing. Add to this limited port facilities for importing bulk cement and hence a high dependence on bagged deliveries, plus excessive freight rates into West Africa and importers will be faced with a landed price for bagged product in excess of US$120 per tonne - not too much of a margin, in what is and will continue to be a difficult market arena.