Cement makers deny forming cartel as prices drop

Dar es Salaam. Cement prices have started to decrease after a sharp rise two weeks ago that prompted government intervention.

The Deputy Minister for Industry, Trade and Investment, Ms Stella Manyanya, met producers on August 15 and gave them a one-week ultimatum to increase supply so as to bring prices down.

A survey by The Citizen has indicated that a 50-kilogramme bag of cement was fetching between Sh13,000 and Sh16,000 at the weekend from Sh15,000 to Sh20,000 two weeks ago in Dar es Salaam.

Manufacturers say the rise in prices was not because of collusion among them, but was due to reduced production as a result of routine maintenance of plants by some of them, among other reasons.

The board chairman of Tanga Cement Company Limited (TCC), Mr Lawrence Masha, said collaboration among cement manufacturers on matters of common interest concerning the industry should not be misinterpreted as providing a forum for collusion.

“It should be understood that much as we can talk with one voice when it comes to industry issues, we remain competitors. It is not allowed by law to collude and we don’t collude,” Mr Masha said at the weekend.

TCC managing director Reinhardt Swart said the decline in supply was a result of routine maintenance by some of the producers.

“It is possible for several producers to undertake their routine plant maintenance at the same time, but there was no way we could collude,” he said, noting that Tanga Cement would conduct its next routine plant maintenance in October or November.

A survey by The Citizen has revealed that prices have started to go down. In Dar es Salaam’s Tegeta area, which is close to the Tanzania Portland Cement (Twiga) plant, prices have since gone down to around Sh16,000 for a 50-kilogramme bag, while in Goba, cement now fetches between Sh13,500 and Sh15,000 for a 50-kilogramme bag.

in Mbagala, Toangoma and Kigamboni areas, one can get a 50-kilogramme cement bag for between Sh13,000 and Sh15,000. A seller at a hardware shop at Goba, Mr Damian Muro, said the recent scarcity has been largely reduced and that the product fetches Sh14000 because demand was still high.

Improved supply

The situation is said to have improved after completion of a routine clinker maintenance at Twiga. Last week, the country manager of Dangote Cement, Mr Jagat Rathee, said in Dar es Salaam that after noticing the shortage, the company decided to increase production whereby it is now producing at least 5,000 tonnes a day, from 2,500 tonnes a few weeks ago.

As for Tanga Cement, which trades as Simba, Mr Masha said the firm had not been affected, adding that supply remained steady in all its key markets of Tanga, Kilimanjaro, Arusha and other northern zone areas.

He said although Dar es Salaam was not Simba Cement’s key market due to challenges associated with transporting the product from Tanga, wherever it (Simba Cement) was available in the commercial city, it was sold for an average of Sh13,000 for a 50-kilogramme.

Tanzania has an estimated annual cement consumption of 6 million tonnes with cement production capacity outstripping demand. Cement manufacturers in the country include Tanzania Portland Cement Limited, Tanga Cement Plc, Dangote Industries Tanzania, Lake Cement Limited and Camel Cement Company. Others are Kilimanjaro Cement Limited, Lee Building Materials Limited, ARM Cement Tanzania Limited, Mbeya Cement Company Limited and Mtwara Cement Limited.