East African import concerns

East African import concerns
03 September 2012

The East Africa Cement Producers Association (EAPC) has flagged concerns over the increasing threat of imports to the region.

The associaion yesterday warned that cement ports are not being subjected to the same technical standards and regulations as domestic cement, increasing the chance of sub-standard products being used in projects.

“Cement is a very sensitive commodity yet the quality issues on imports are not being addressed at such a time when the number of collapsing buildings is rising,” said Kephar Tande, the managing director of East African Portland Cement Company and chairman of the industry’s umbrella association.

Tande said Kenyan manufacturers are discussing with the Kenya Bureau of Standards to work out particulars that will tighten the requirements on standards and packaging of the commodity. “We want the markings on the bags to include expiry dates, and information on storage and proper handling of cement,” he said. “Importers may not pay attention to these standards.”

The EACPA also alleged that foreign cement manufacturers are using local agents who are unqualified and should now be regulated. “Importers are having unfair advantage over local producers.”

Members of the EAPC also want cement imports halted, arguing that the region has a surplus production. The region has an annual demand of about 5Mt of cement but is currently producing about 7Mt, according to Tande. He said the excess capacity means producers are incurring cost on investments in factories, with facilities utilising about 78 per cent capacity for most part of the year. The industry’s profitability in the year is expected to dip, EACPA said, with average net profits of below 10 per cent compared to the past year’s 15 per cent average.

“We were faced with pressures of costs in terms of production due to currency depreciation, electricity cost and fuel prices. Competition also increased and prices stagnated despite high cost of marketing,” said Tande. (Source: The Star).

Published under Cement News