Zambia’s cement market has experienced a dramatic surge in prices. Whereas before, prices of K52 000 for 50 kg of bagged cement were the norm, the same bags are now fetching between K70 000 and K80 000 on the black market.
The quick growth that the construction sector has experienced over the last few months has brought about an increase in demand. While this demand inflation would no doubt have been welcomed with open arms were it not for the temporary upset to production output at Zambezi Portland Cement’s (ZPC) Ndola plant, the combination of these facts has conspired to unbalance the scales of supply and demand. Alongside a strong demand from the export market, the cement supply has become somewhat squeezed, with the result being this price surge.
The Zambian National Council for Construction (NCC) has also pointed to the government’s decision to invest in the multi-billion Kwacha Link Zambia 8000 Road Construction project as a contributor to the recent increases in demand.
When there is strong demand from the infrastructure, domestic construction and export, it is usually a cause for celebration, but when the demands cannot be met, the result is, as one can currently see in the Zambian construction industry, one of panic. In light of the circumstances, NCC Chairman, Levy Zulu, called for cement manufacturers and retailers alike not to take advantage of the situation in order to make unnecessary profits. He also expressed his optimism that the upcoming completion of Dangote Cement’s new plant in Ndola will help to stabilise prices.
ZPC, one of the country’s leading cement manufacturers has also acknowledged the high demand, but company spokespeople have said that rumours of shortage are being blown out of proportion; in spite of the current disruption to its Ndola plant, the company has continued to meet its daily production target of 1700 tpd. With new capacity of its own soon to come online, the company will soon find itself in a strong position to stabilise prices
Essentially, the price of cement needs to be stabilised, otherwise the construction industry will not be able to take advantage of its current high demand to continue to contribute to the country’s economic development.
Written by Jack Davidson.
Read the article online at: https://www.worldcement.com/africa-middle-east/19122012/tanzania_cement_prices_rise_demand_exports_africa_796/