Mozambique: Minister of Industry and Trade Predicts Stabilisation of Cement Price

Mozambique’s Minister of Industry and Trade, Armando Inroga, predicted on Wednesday that the price of cement will stabilize by December, once national cement production has normalized.

In recent months there have been sharp rises in the retail price of cement. In Maputo markets the price of a 50 kilo sack of cement has risen from 215 meticais (7.5 US dollars) to 240 meticais.

The price is much higher in the central and northern provinces. In Sofala, Nampula, Niassa and Cabo Delgado prices are in excess of 350 meticais a sack, and in Manica the price has reached 500 meticais.

Speaking to reporters, Inroga blamed a serious breakdown in August in the country’s largest cement factory, owned by the company Cimentos de Mocambique. There had also been increases in the prices of cement on the world market.

Inroga said national cement production is usually between 170,000 and 200,000 tonnes a month. But since August production has plummeted – he put the amount of Mozambican cement available at between 97,000 and 130,000 tonnes a month.

He believed that, as from November or December, even with the heavy demand for cement for major public works, the country will return to “relative stability in cement prices”.

The government has been urging more companies to invest in cement production, in the hope that competition will push the price down. Next year, said Inroga, “we believe that the price of cement will fall again, when three new cement factories begin operating. We believe that the ideal price for cement on the market should be no higher than 200 meticais a sack”.

Two of the factories Inroga mentioned should have begun production this year, but their opening has been postponed into 2013. They will each have the capacity to produce 500,000 tonnes a year.

The largest factory of all, with an annual capacity of two million tonnes, is being built at Salamanga, south of Maputo, and should start producing in 2014.

“We will have a production capacity of about five million tonnes as from 2014, rising to 7.5 million tonnes in 2015”, forecast Inroga. “At that time despite the major construction projects under way, the cement price will be 200 meticais a sack, because there will be sufficient supplies”.