Zim cement industry pleads for power price cut as exports dry up

Zim cement industry pleads for power price cut as exports dry up

HARARE, May 27 (The Source) – Zimbabwe cement manufacturers have called for a reduction in the price of electricity after exports into the region dried up as high production costs make local products uncompetitive.

An industry representative, Kelibone Masiyane, on Friday told a meeting organized by the Ministry of Industry and Trade to discuss import control measures that exports dropped from over 100,000 tonnes in 2014 to less than 40,000 tonnes last year and there has been none at all this year.

Masiyane said at $150 per tonne, the cost of production was twice as high as that of other countries in the region mainly due to high power costs, which at 14 cents per kilowat hour, make up 25 percent of production costs.

“At this stage we are quite vulnerable and there is no way we can compete. We need to relook the manufacturing cost base to reduce the cost of electricity and diesel Also, there are a lot of levies and duties that we have to deal with,” said Masiyane, who is also  the managing director for Pretoria Portland Cement (PPC).

Zimbabwe’s cement industry mainly comprises of three players: PPC, Larfarge Zimbabwe and Sino-Zim, all with a combined installed capacity of 1, 46 million tonnes per annum.   PPC has 760,000 tonne capacity, Lafarge 450,000 tonnes and Sino-Zim Cement 250,000 tonnes.

PCC expects to add 700,000 tonne cement capacity from its new Harare plant, expected to be commissioned later this year.

The country’s demand for cement for the year is estimated at 1,17 million tonnes.

Masiyane said government needs to control imports because the country has enough capacity to meet demand up until 2030.

“As industry we are asking for the imposition of an import tariff which equalizes the landing cost into Zimbabwe to level the playing field. In the event of a shortage, only players in the industry should be allowed to import on behalf of the country so we ask for a review of the import permits that have been already issued,” he said.

The industry has invested a combined $185 million over the past five years.

In August last year, Nigerian billionaire Aliko Dangote announced plans to build a 1,5 million tonne cement plant in Zimbabwe.