author: anonymous
while global cement prices have fallen by 10%, manufacturers are fighting for survival in rwanda and other east african landlocked countries, and consumers will continue to spend more to buy cement.
small markets and high operating costs have forced cement companies to maintain operations at high prices. east african landlocked countries - uganda and rwanda - have a weaker cement business. rwanda spends an average of $4990 in imports of raw materials from 20 feet of containers, while tanzania and kenya cost less. this explains why cement shipped from tanzania to rwanda still has a competitive advantage in kigali (kigali). price comparison shows that the price of simba cement produced in tanzania is 110 us dollars / ton, the price of twiga is 100 us dollars / ton, and the price of kilimanjaro is 100 us dollars / ton. the price of hima cement in uganda is $177 / ton, while the price of the cimerwa cement produced in rwanda is $178 / ton.
"price is a factor in logistics and operating costs. "the biggest challenge on the african continent is the distance from cement to the market," says njombo pretoria, director of international business at portland cement lekula. for example, uganda tororo cement industries factory is located in tororo (tororo), and the limestone from the karamoja (carla mo ga), the largest consumer market for kampala (kampala).
similarly, the rwandan cement dealer cimerwa is located 450 kilometers from kigali, the largest cement consumer market.
cement manufacturers also mention energy costs, which are the factors before the final production of cement. "for each bag of cement, the energy cost accounts for 40% of the total cost," says dr. ivan twagirashema, director of cimerwa. he added that the region must find ways to cut production costs.
experts say the cement industry is a capital intensive industry and industry profits depend on income. "from a policy point of view, the region should protect the local market from the impact of cheap cement imports," says patrick cement, managing director of hima mugenyi.
at present, the global cement market production is surging, and demand is still relatively dull. overall, new capacity surges, demand growth is slow, and some regions even decline. as a result, the supply and demand balance is getting worse, and some market prices are very stressful, "says ia cement ltd ceo imran akran.
however, rwanda's infrastructure minister james musoni said the development potential of the region existing huge, commercial projects, residential development and sustained growth of government investment in infrastructure, provides a powerful guarantee for the cement industry demand.
at the end of the eighth session of the african cement summit, statistics show that in sub-saharan africa, nigeria is still the largest cement consumer, consumption in 2013 18.3 million tons, followed by south africa, the annual consumption of 12.2 million tons. the two countries together account for 50% of the total cement consumption in sub-saharan africa.
over the past decade, east africa's cement consumption has grown at an average annual rate of 14% and is expected to grow at a rate of 8% in the short term, with cement production expected to reach 14.4 million tonnes by 2017.
at present, cement from india, pakistan and china has flooded the entire east african market. growth from imported cement from asian countries has posed the greatest challenge to the east african cement industry, particularly in tanzania, where producers estimate that 300,000 tonnes of inexpensive cement hit the domestic market in various ways each year.
kenya's cement market is in close contact with uganda and tanzania, where several producers have production lines in more than two countries, and thus the cement market is more extensive.
