Rising cement prices, soaring construction costs, Rwanda

Rising cement prices, soaring construction costs, Rwanda
08 June 2007

Increases in the domestic price of cement appear imminent and will raise the cost of major construction projects in the country.  
This comes after the country’s distributors and retailers hiked prices over speculations that Rwanda Cement (Cimerwa) had closed. 
But The New Times has leant that the factory is operational and producing at full capacity.  
Claude Barihuta, Cimerwa director general, blamed the current price increase on dealers. He said dealers are hording cement to cause the shortage on the market, and that they exploit unsuspecting customers .  
"There are people who are ready to buy it at any cost, so some people take advantage of this and sell it highly," Barihuta said.  
Due to speculation, a bag of Rwanda cement hiked to Frw7,200 from Frw5,700 six months ago. Hima Cement imported from Uganda has increased from Frw75,000 to Frw97,000.  
Tadeo Karaki, a cement loader in Remera, attributes the increase to what he called limited supply.  
To complement the local supply, the government opened the border to allow cement from other East African countries. Data from Cimerwa indicates that last year Rwanda imported 67.8 tonnes of cement from Uganda.  
Cimerwa’s production capacity is 8,000 tonnes per month and 100,000tpa on average. This means the quantity produced is not enough to sustain the booming construction industry in Rwanda. The country needs more 100,000t yearly to sustain the current demand.  
By press time, the retail price of a sack of cement in Kigali city had soared to Frw11,100.  
But Cimerwa boss said they will do whatever it takes to stabilise prices.  
"Even if it is your business, we cannot leave people to buy cement at Frw11,000. The market price is Frw7,200," Barihuta said.  
Published under Cement News