Coboce: Bolivia’s demand growth requires further investment

Coboce: Bolivia’s demand growth requires further investment
11 December 2012

Without new investment in the cement industry, Cochabamba and Bolivia as a whole could face new supply shortages by 2016. In the past two years, the country has seen demand growth double from seven to 14 per cent and in some cases, growth peaks of up to 26 per cent were recorded.

In 2013, a new plant will be launched but the growing demand, fuelled by the growth of public and private works will require further investment. This year the government announced a US$2bn injection in infrastructure projects. In addition, growth and greater liquidity in the local economy of Cochabamba require an increase in cement supply.

While cement producer Coboce invested over US$100m to increase production, further action has been required. The company has been importing clinker from Korea, but at four times the local cost, this has proven an expensive solution to increase cement production from 27,000 to 31,000 bags per day.

In a separate statement, the cement producer warned that the financial penalty of US$1.2m by the Fiscal and Social Control of Companies Authority (AEMP) would negatively impact not only its cement output but also put imported inputs and the new plant at Irpa Irpa on thin ice. The new factory is scheduled to come online in 2013, adding 60,000 bags of 50kg from next year.

Together with Sociedad Boliviana de Cemento (Soboce) of La Paz, Fancesa of Sucre and Itacamba of Santa Cruz, Coboce was fined BOB72.64m as penalty to forming a cartel to control the cement market, set prices, restrict competition and define the offer. According to the ruling, Soboce must pay 70.56 per cent, Fancesa 17.67 per cent, Coboce 11.57 per cent, and Itacamba 0.19 per cent. The cement producer received notification of the financial penalty on 4 December, according to CEO Fernando Quiroga.

"We are fined for things that are not true. As Coboce we have made every effort to not leave the Cochabamba market undersupplied. We have come to produce 30,000 bags day and this year we imported 85,000t of clinker from Korea, so there would be no shortage to the population, "he said.

Published under Cement News