UGANDA, Kampala | Real Muloodi News | In good news for the construction industry, cement prices in Uganda have dropped, following the entry of two new cement manufacturers entering the market; Simba Cement, and Kampala Cement.
Four cement factories are now operating in Uganda, generating competition that has reduced prices that were previously monopolised by Hima Cement (Lafarge/Holcim) and Tororo Cement. Although, Hima and Tororo continue to dominate the market.
The increased competition was aided by the Ministry of Trade, Industry and Co-operatives’ measures to fast-track licensing of new cement manufacturers.
The drop in prices has been welcomed by the construction industry, who say it has been a long time coming. A 50 kilogram bag of cement now retails at an average price of 28,000 Ugandan shillings (US$5.70), down from 39,000 Ugandan shillings (US$10.80).
The removal of a 10% import duty on clicker also reduced production costs for those manufacturers who use clinker as a raw material in the production of cement. Although, Hima and Tororo rely on Pozollana, mining it in Kasese, Kamwenge, and Tororo.
Mr Nicola George, the country chief executive of Hima Cement, had denied that it was producers increasing cement prices.
“It is the distribution channel that has been impacted,” he said, adding they have been experiencing challenges related to power and low supply of raw material, which have subsequently affected supply volumes.
“Because distributors and retailers are not getting enough volumes, they [are rising prices] to have large margins on what they have,” he added.
The price fall follows the government’s threat to allow imported cement on a reduced duty if the two major cement manufacturers, Hima and Tororo Cement, did not increase production to reduce prices.
About the Two New Cement Manufacturers
Simba Cement is a subsidiary of National Cement Company Limited, a Kenyan construction materials manufacturer and a member of the Devki Group of companies.
Kampala Cement joined the Ugandan market in 2015, with the highest cement grade under Uganda National Bureau of Standards (UBOS) / East African standards, which is regularly tested at the UNBS Laboratories.
Kampala Cement plant produces over 1.2 million metric tons per year under their five brands. The brands are; NYATI – 32.5R Cem IV, Pozzolanic Cement, CHUI – 32.5R Cem II, PPC, KIFARU – 42.5R & 42.5N Cem II, PPC, NDOVU – 42.5R & 42.5N Cem I, OPC and SUPERCRETE – 52.5N Cem I, OPC.
In January 2018, Uganda’s cement consumption was estimated to be 2.4 million tonnes per year, accounting for 35.3 per cent of total production. The production percentage is increasing because of the country’s many major ongoing infrastructure projects. Consumption is expected to rise because of lower prices.
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