Increased construction works for the November Commonwealth Heads of Government Meeting (CHOGM) have boosted the demand for cement by about 9%.
Exports to Rwanda, the DR Congo, Burundi and southern Sudan have also not helped the situation.
Sources said local traders prefer selling to foreign importers because they pay in dollars.
This has created a shortage in the local market, pushing retail prices to sh21,000 a bag from sh18,000, about a year ago.
This has thrown the manufacturers into expansion moves to counter the demand.
“The demand for cement has been growing at an average rate of between 7% and 9%. The CHOGM construction works have boosted the demand. We are finalising arrangements to expand our production,” said David Njoroge, the Hima Cement general manager.
Hima produces 300,000tpa of cement.
The company plans an additional 480,000t when its new plant at Namanve commences production in 2009, Njoroge said.
He disclosed that the company was investing $93m (about sh158b) in its explanation project which would see the Hima plant’s capacity improved.
He said they were in the final stages of securing the mining rights and land at the Namanve Industrial Park.
Hima and Tororo Cement are the only local cement manufacturing companies. Tororo has installed capacity of 900,000tpa but is operating at 50% capacity.
Uganda also imports more cement from Kenya. Brij Gagrani, the Tororo Cement general manager, decried the high costs of production.
“The availability of limestone in the country is limited yet it is the main raw material.
“But we are optimistic that with the East African integration, all inputs will move freely to reduce the imbalances,” Gagrani said.
He, however, described the future of the cement industry as bright. He based this on the possibility of additional power and oil.