Circem sees cement decline

Circem sees cement decline
Published: 19 February 2004

Zimbabwe: Circle Cement Limited (Circem) has experienced a decline in demand for cement in the local market due to harsh economic conditions prevailing in the country, The Financial Gazette established this week. Industry players said the industry had witnessed a decline in the number of new construction projects and this had negatively affected demand for cement. 

The Harare-based cement manufacturing giant is also facing operational problems as a result of coal shortages and high transport costs. A lot of companies in the manufacturing sector have been badly affected by the shortage of coal over the past 12 months.  Some of these companies have now resorted to importing coal from South Africa, a move that has resulted in the increased input costs.  Circle managing director, Isiah Bingwa, said the company had shelved its export plans due to lack of demand for cement and government controls on cement exports.  "We are strongly monitored. We cannot even increase our prices without informing the government or seeking approval," he said.  The severe shortage of foreign currency to buy spare parts has also continued to affect the operations of the company.

The group, Bingwa said, was operating at 80 per cent of its capacity because of the problems. However, Circle embarked on an expansion drive recently that included the development of a new quarry and the purchase of new equipment such as crushers, millers and a replacement kiln.  The exercise is expected to place the group as a leader in the Pan Africa Cement Group that falls under Lafarge, whose subsidiaries form a regional network with a capacity to produce around 1.3Mta of cement.