Namibian cement consumers disappointed

The price differences of competing cement brands in the country have caused complaints from consumers. The reported price hike from NAD70 per 50 kg bag, to nearly NAD90 is also said to be a cause of the anger.

The government’s promise that “cement would be cheaper with the opening of the country's own cement plant at Otavi” has left many consumers upset and feeling disappointed. There was a similar sense of disappointment from building material retailers earlier in the year, but this time, it is reportedly directed at the entire cement market.

There are five major cement producers in Namibia who import cement products from China, Portugal, Brazil, as well as from the South African cement manufacturer, AfriSam, which was the market leader before Namibia opened its own cement company, Ohorongo. The company, and indeed the country’s first plant at Otavi opened ahead of schedule at the end of last year, raising high expectations of lower cement prices and doing away with uncompetitive retail and distribution practices on the market.

Thomas Indji, the chairperson for the northern branch of the Namibia Chamber of Commerce and Industry, promised recently to look into the consumer complaints received. The complaints received thus far indicate that the price of cement has jumped from just under NAD70 per bag to nearly NAD90.

The absence of a clear price difference between competing cement brands has compounded the irritation felt, something that has again prompted market speculation on the real reason for the closure of AfriSam’s Namibian office.

AfriSam Namibia recently closed its offices in the country, which sparked market speculation of an unofficial agreement with Ohorongo Cement, similar to a proposed merger that the Namibian Competition Commission rejected on grounds of possible trade restrictions.

Both companies dismissed such speculation as unsubstantiated, with Dr Stephan Olivier, Chief Executive Officer for AfriSam South Africa noting that the closure was because “it makes economic sense to service customers out of our Johannesburg office and to quote prices that include transport costs”.

Equally, Ohorongo Cement commented the company has a strict policy of being the cheapest above its competitors, hence joining forces with its competitors was out.

Because of its initial approach to clients using their own transport, Ohorongo Cement met outright objections from northern retailers, ensuring a rough start for the cement manufacturer. The issue was eventually resolved amicably, with the intervention of the Namibia Chamber of Commerce and Industry on behalf of the retailers.

Read the article online at: https://www.worldcement.com/africa-middle-east/13052011/namibian_cement_consumers_disappointed/