Cement factory paralysed, prices rise , Mozambique

Cement factory paralysed, prices rise , Mozambique
Published: 11 April 2005

Southern Mozambique is running out of cement, and, given the completely unregulated nature of the market, the price of cement has risen sharply, reports Friday’s issue of the Beira daily, "Diario de Mocambique". The problem is that a major breakdown occurred about a month ago in the cement factory in the city of Matola, which normally supplies the whole southern third of the country.

According to Daniel Fumo, chairman of the National Engineering Laboratory (LEN), a specialist body of the Ministry of Public Works, Mozambique consumes more than 800,000t of cement a year. Normally between 80 and 90 per cent of this is produced by the three factories owned by the company Cimentos de Mocambique (in which the major shareholder is the Portuguese cement giant, Cimpor).

When the Matola factory, the largest of the three plants, stopped producing, stocks of cement began to run out, and the only alternative was to import cement. Prior to this crisis cement was selling for 160,000 meticais (about eight US dollars) for a 50 kilo sack. Now the price has risen to 190,000 or 200,000 meticais.

Fumo said there is nothing the Public Works Ministry can do about the rising price. The market is liberalised, operating according to rules of supply and demand, he said - so anyone selling cement can charge whatever price they like, and would-be purchasers can take it or leave it. "The only regulating factor we have is the Matola factory", said Fumo. "If it were operating, the market requirements would be met, and there would be no room for price speculation".