Cement prices are rising due to a combination of factors; plant breakdowns and scheduled maintenance at the country’s major cement producers plus the expiry of import licences. All this has happened at a time of record high demand.
“The nation is advised that following reports of artificial cement shortage in the market and the spiralling prices cabinet has approved the importation of cement by individuals and companies with free funds,” cabinet said yesterday.
Until December, each individual and company can import a maximum of five tonnes of cement.
Cement producers for years lobbied the government to limit imports, saying they could not compete with cheaper imports given the high cost of production at home.
In 2021, the government gazetted Statutory Instrument 89 of 2021, which restricted foreign cement by issuing import licences. Many of these licences have since expired and the government had been reluctant to renew them, causing a shortage.
The high prices threaten to stall public infrastructure projects and house construction, which have driven a construction boom and helped prop up sections of the economy.
Due to government infrastructure projects and home builders, cement consumption has been rising over recent years. Cement consumption increased from below one million tonnes in 2017 to around 1.6 million tonnes this year, according to estimates by PPC, the country’s biggest producer.
In total, cement companies have a capacity of 2.6 million tonnes of cement, which should meet current demand. However, production costs and plant breakdowns are keeping them from producing enough cement.
PPC’s cement sales grew by 42% in the first five months of this year, as the company recovered from a plant maintenance shutdown last year.
PPC has a capacity of 1.4 million tonnes of cement per year at its locations in Harare and Bulawayo, and controls just over 60% of the market, according to industry estimates.
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