AFRICA: ZIMBABWE: Cement Prices Shoot Up

CEMENT prices have shot up over the past few weeks as dealers take advantage of shortages caused by a major plant breakdown at Lafarge.

Traders are now selling a 50kg bag at between US$16 and US$20. The recommended average price is US$12,50 a bag.

Lafarge Zimbabwe confirmed yesterday that one of its two mills was down.

Lafarge managing director Mr Jonathan Shonhiwa said it was unfortunate that some retailers were taking advantage of the shortage to exploit customers.

"We are currently operating one cement mill as the other one has broken down," said Mr Shonhiwa.

"The cement mill breakdown has resulted in shortages on the market (since) we are a major player."

He said the company was working "flat out" to restore normalcy.

"Very few people are getting the product through normal channels," said one dealer.

"There are now some middlemen who are selling cement to us at prices that are even higher than the recommended retail prices."

The recommended retail price for masonry is US$9,79 and US$10,79 for PPC.

The cement shortage has come at a time when the construction industry is beginning to pick up as a result of steady recovery of the economy.

This could push up building costs if the shortages are not addressed soon.

President of the Construction Industry Federation of Zimbabwe Mr Philip Chiya-ngwa, who is also a shareholder at Lafarge, said he was going to investigate what was pushing the prices up.

A survey by The Herald yesterday revealed that most retailers in Harare did not have cement.

Workers at Farm and City said when in stock, PPC15 costs US$15 per bag, Masonry US$12 while at Mohammed Mussa Wholesalers PPC sold for US$13,50 and Masonry US$12,50 when in stock.

Retailers at Magaba and Msasa were demanding between US$16 and US$20.

The Herald was yesterday inundated with calls from people seeking to know what had triggered the price increase.

"My builder had just started working on the foundation and my budget has been seriously affected. I had budgeted US$1 200 for 100 bags of cement needed for the slab and I do not know what I am going to do," said Mr Samuel Shango of Kwekwe.

AFRICA: Cement Price - Dealers Promise to Cooperate With Dangote

Cement dealers and distributors across the country have promised to cooperate with the management of the Dangote Cement plc to ensure that the benefits of more production of the product from its new Ibese factory plant in Ogun State get down to the end users at affordable price.

A statement from the Dangote Group said the dealers made the pledge at the weekend while on a facility tour of the cement plant to see the level of progress of work done so far in the soon-to-be ready factory.

The statement said that the dealers expressed satisfaction at the level of commitment of the President of Dangote Group, Alhaji Aliko Dangote on the need to have sufficient cement to meet local demand, stop further importation of the product and embark on its exportation.

It said that the dealers and the distributors who came under different associations were surprised at the size of the plant which ranked among the largest in the world and promises to produce additional six million metric tons of cement when it commences operations later this month.

They assured that they would complement the efforts and determination of Alhaji Dangote in establishing more cement factories which is meant to produce enough for local consumption and to stop importation of the product so as to bring down the price per bag.

They said that they would ensure for the reduction of the price of cement in the wake of enough production for local demand, adding that they will do that by constantly monitoring the process of distribution and checkmate the activities of middle men whose roles in the distribution chain of cement has often times accounted for skyrocketing price of the commodity.

Chairman of Ifelodun Dealers Association, Lasisi Akanbi who spoke on behalf of others,thanked Dangote Cement for making them part of the success story of the new plant,adding that they were waiting eagerly to have the plant come on stream.

In his remark, the Managing Director of the Lagos Cement Terminal of Dangote Cement, Akin Adesokan thanked the dealers for their faith and steadfastness in the Dangote brand and urged them to stay by the group's products particularly, Dangote cement.

AFRICA: NIGERIA: Dangote Group Plans Rail Lines From Factories to Reduce Cement Cost

THE Dangote Group has revealed it will soon construct rail tracks from all its cement factories to the national railway to reduce transportation and cost of the product.

Mr. Akin Adesokan, the Managing Director of Dangote Cement Terminal in Lagos, disclosed this on Sunday when he conducted distributors round the Dangote Cement Factory in Ibese in Ogun.

He said the project was necessary because the cost of transporting bulky goods such as cement in the country was still a challenge.

Adesokan said Dangote would also establish a vessel freight to boost the exportation of goods to the Economic Com- munity of West African States (ECOWAS) markets.

He said the move was to forge a strong bilateral trade relation- ship among the ECOWAS member-countries. Adesokan said with the vessel freight, the movement of goods outside and within the country would reduce the cost of haulage and the product.

'The challenge is taking our goods from the factory to the ports, and since there is no railway system, it makes transportation of bulky goods burdensome,' he said.

The official said Dangote had invested heavily on haulage because the company has bought over 2,000 trucks to distribute cement to all depots in the country.

'This is our own Corporate Social Responsibility and no other company has done this.

'The price will definitely come down because the Chairman of Dangote Group, Aliko Dangote, has the interest of Nigerians at heart.

'He wants to bring down the price of cement to the barest minimum so that everybody can afford it.' 'The factory in Ibese has the capacity to produce six million tonnes of cement per annum and it is to bring cement to every part of the South-West region.

'Before now, we cannot bring cement from Obajana down to the South-West. But, with this factory now, it will be a thing of the past.'

'From Ibese, we can take cement to Ibadan, Oyo, Ogun and all other parts of the South West region,' he said.

Adesokan said he took cement distributors to the factory because he wanted them to see the extent of readiness of the factory.

He pointed out that the demand for cement in the country was currently about 17 million metric tonnes annually but envisaged that the demand would increase this year.

The official assured that the Ibese factory would be completed this month, while the first batch of production would follow immediately.

A distributor with the Ifelodun Cement Dealers Association, Ewekoro, Mr. Abodunrin Matthew, called on the Federal Government to address the issue of transportation infrastructure in the country.

'What we need from the government are good roads, because there is a shortcut to the Ibese factory through Papa to Lagos-Ibadan expressway.'

'The government has to support local manufacturing companies like Dangote for it to help the country stop the importation of some goods into the country,' Matthew said.

Another distributor, the Chief Executive Officer of David Excellence Nigeria Limited, Mr.Ade Shaleye, advised that Dangote company must put in place infrastructure. He said this would help to make its goods available to distributors at less cost.

AFRICA: KENYA: Sh12 Billion Pokot Cement Factory to Be Built Soon

The government has said construction of the stalled Sh12 billion Pokot Cement Factory will start soon. Investors from India who bought land for the project have not pulled out of the area, according to Acting Managing Director of Kerio Valley Development Authority, Francis Kipkech.

Prime Minister Raila Odinga commissioned the factory at Ortum in West Pokot in July 2010 and since then construction has not started. Area residents are now questioning why the project stalled. "The project has not stalled and the investor is now assembling his requirements before proceeding with the the work at the site. Its not a small project and requires proper planning," said Kipkech.

The factory is to be put up by investors from Cemtech which has already received licences from the government to proceed with the project. Cemtech is a subsidiary of Sanghi Group of India which is the world's leading cement producer. Chief Executive of Cemtech Rajesh Rawal had confirmed that they had finalised plans to put up the cement factory which was expected to produce more than 1.2 million tonnes of cement annually. Rawal has not been accessible for comment on the progress of the project.

Pokot County Council chairman David Moiben said the process of putting up the factory is detailed and may take time. "As far as I know the project will take off but they have to plan properly and bring in necessary material and equipment," said Moiben. The group had outlined plans to put up an ultra modern, environmentally friendly cement plant with state of art technology along with staff houses, schools, a medical centre, staff training centre and other amenities and facilities on 650 acres of freehold land which the firm has already purchased from residents of the area.

Before the project was commissioned Rajesh confirmed that Cemtech had already paid Ksh 120 million to purchase the factory site and the project had also been licensed by the Pokot County Council which gave Cemtech 99 years of rights to mine limestone for the cement production in the area. As part of the project plan the group will also put up a 64 Mw power plant and 50 Mw from the plant power would be sold to the national power grid. tech. The Pokot factory was expected to directly employ 1,200 people and benefit another 40,000 residents of the arid region.

MEXICO: Mexico's Cemex hits 13-year low, debt worries weigh

Shares of Mexican cement maker Cemex fell to a 13-year low on Tuesday on concerns about slowing growth in Europe and the United States will hobble the company's ability to meet its debt obligations.

One of the world's biggest cement makers, Cemex almost defaulted in 2009 on $15 billion in debt used to fund its purchase of rival Rinker, but it negotiated a refinancing deal.

Now, steep losses in the Mexican currency and expectations of slowing growth in its main markets, the United States and Europe, are raising the chance that Cemex could fail to meet targets with creditors to boost its cash flow.

"This downturn in global markets is really complicating their situation," said Gerardo Roman, head of stock trading at brokerage Actinver in Mexico City.

"All the heavily indebted companies are getting hit, and they are going to keep getting hit," Roman said.

Cemex shares (CMXCPO.MX) fell 10 percent to 3.36 pesos. The stock has shed more than 46 percent since mid-September.