The cement sector is seen as the driving force of the manufacturing industry in Tunisia. In fact, companies based in Tunisia are meeting market demand and exporting even greater quantities to neighbouring countries, Libya and Algeria. Since 2011 – and despite the economic recession during the post-revolution period – the demand for cement continued to increase thanks to private consumption and the domestic market.
Tunisia’s cement industry dates back to 1936 when the first cement plant came online (C.A.T.). Today, there are nine cement plants in the country: one produces white cement while the rest produce Portland cement (grey). The most recent of these is Carthage Cement, which came online in 2013.
The total installed cement capacity is about 13.5 million tpy (2014). This is set to rise to more than 16 million tpy once ongoing projects are complete. Given the economic situation and favourable environment, new projects are being studied in order to create more cement plants and to meet additional demand from both the domestic and export markets.
The cement industry is composed of three public companies (more than 5 million tpy) and six private companies, which belong to multinational groups such as Prasa and Cimpor. They are all either located near to raw material resources or close to areas of high consumption.
In 1998, the state adopted the policy of disengagement from competitive activities and a restructuring plan for the national economy. This has led to interest from investors, who appreciate the business climate (legal framework: fiscal and non-fiscal advantages), low labour costs and an abundance of clinker.
Since 2007, cement production has increased about 3% per year (except in 2011). Therefore, the domestic market is sufficiently supplied with cement. Exports have also increased. For instance, the quantity exported in 2014 was about 1.26 million t (Portland cement) against 0.580 million t in 2013, a 118% increase.
However, the problem is that exports are neither regular nor stable because both state and cement producers give priority to the local market and would like to maintain their market share. Furthermore, a preliminary license was required to export cement until October 2014 when this decision was repealed.
Until the end of 2013, the cement price was managed by the state. The price was fixed and there was no competition between companies because cement was sold for the same price according to its category.
However, in January 2014, the State decided to stop subsidising energy and in accordance with the government policy of liberalisation of the cement industry, prices became free. At present, companies are struggling to sell their product into/out of Tunisia. The average price is between TND150 and 170/t (TND1 = US$0.52). This is one of the lowest prices in the Mediterranean region.
Recently, the government has decided to allow producers to sell cement directly to the consumer in order to decrease prices and stop speculation caused by traders.
Respecting the environment
The cement industry is known to be a big consumer of energy, responsible for 11% of the country’s total electric consumption and one third of energy consumption in the industrial sector.
The cost of energy represents around a third of the production cost per tonne. For this reason, cement plants invest to diversify resources and rationalise energy usage. Some companies use natural gas in order to reduce both cost and pollution. In other cases, cement plants use petcoke or heavy oil and they have committed to respect the environmental rules according to the Tunisian standards.
Written by Ahmed Methlouthi, Ministry of Trade, Tunisia. This article featured in the May 2015 issue of World Cement. Subscribers can read the full May issue by logging in. They can also read the magazine on smart phones and tablets by downloading World Cement’s app.
Read the article online at: https://www.worldcement.com/africa-middle-east/14052015/tunisia-sustained-growth-839/