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Mozambique: mixed reactions over cement price readjustment as construction industry gags.

Mozambique: mixed reactions over cement price readjustment as construction industry gags

Mozambique Ministry of Industry and Commerce has repudiated on the acts some companies which are demanding a readjustment in the sale price of cement in the south of the country are not even in the cement industry.

This comes after the Dugogo and other firms in the sector persuaded the government to allow readjustment of cement price in the past two weeks leading to customers’ outcry.

The government Mozambique is now investigating into what prompt the demand by some cement manufacturing companies and what leads Dugogo Cimentos to increase its cement sales price.

 Some customers and producers claim that Dugongo is the sole clinker producer in the country and therefore puts others in a state of dependency, as they do not have this component for their production units.

 Minister of Industry and Commerce, Carlos Mesquita, said that some companies do not quality to be included in the cement industry class.

“Not all of them are cement plants. There are classes,” said Minister Mesquita.

 “There are full-cycle cement plants, such as Dugongo, for example, which extracts limestone, processes it for clinker, produces cement and sells it,” he explained.

“Then there are companies that take the process half-way. They import or buy the clinker and then move forward,” he said.

Finally, “There are some, which may turn out to be those that they say have closed their doors, which buy the finished product [cement] here and there and then mix it and are also qualified as cement plants. They are not. We must use the right terminology,” he stressed.

” So, this is all being analysed in depth because we want our industries to thrive within a competitive environment, for the development of this country. And we see the impact that prices are having today.

Activity is created; we have more masons, more works are taking place, it has a multiplier effect. This is what we want to happen, not only in cement but in other industries,” Minister Mesquita said.

Furthermore, the minister added, there is plenty of limestone – the raw material for producing clinker –in Mozambique, begging the question, why no company before Dugongo had taken it upon themselves to produce clinker.

A tour of the main outlets revealed that a 50 kg bag is now priced at between 700 and 800 meticais, up from the 500 to 520 meticais charged hitherto.

The situation is concerning for citizens, who are forced to reschedule their plans, especially with regard to house construction.

Meanwhile the situation is the same in the neighbouring country Zimbabwe where cement price has increased on average, a 50 kg bag which ordinarily costs US$10, 50 is going for about US$13. In local currency, retailers are using the parallel exchange rate of between $160 and $170: US$, placing the commodity beyond the reach of many customers who remunerated in local rtgs.

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