Malawi Government agencies yesterday served an infringement notice on Agrocomm Trade Limited, one of the traders assisted with forex to inport cheap cement from Zambia purportedly to stabilise prices on the local market.
The notice The Nation has seen and corroborated by officials said Agrocomm Trade was allegedly hoarding of 7800 bags of Sinoma cement from Zambia, enough to load 13 trucks.
Agrocomm is one of the four companies which benefitted from the provision of $1 million, or $250 000 (about K432 million) each for the importation of cement from Zambia. The others are Randera, Melton Hardware and Mada Tiles.
Yesterday, a team from Competition and Fair Trading Commission (CFTC) and the Ministry of Trade and Industry invaded Agrocomm premises in Lilongwe where they found the alleged hoarded cement and eventually issued the infringement notice.
Reads a CFTC notice: “The commission visited your warehouse and observed the following: That you were hoarding 7 800 bags [13 trucks] of cement [Sinoma].
“The above is prohibited under the Competition and Fair Trading Act (CFTA): Section 51 (a) withholding or destroying producer or consumer goods or rendering unserviceable or destroying the means of production and distribution of such goods, whether directly or indirectly, with the aim of bringing about a price increase.”
After visiting the site, CFTC director of consumer affairs Brenda Bota said the inspection followed complaints from consumers, but also after noting that Agrocomm had not sold the cement it imported.
She said: “We expect them to respond to the infringement notice within 14 days, explaining to the commission as to why they were not selling this cement. After this, a full investigation will be done by CFTC and a report will be done for determination.”
Secretary for Trade and Industry Christina Zakeyo said it was unfortunate that while government invested $1 million in the four companies to import the supplies, the market remained starved.
“The issue is that the government had to make a lot of sacrifices, we removed the 10 percent surcharge and guided prices, so by doing that we believe they have not been fair to government and consumers. That’s why we have invited every consumer to come and buy this cement,” she said.
Zakeyo said in the past two weeks, some distributors have brought in 67 trucks and sold out all, adding, even for Agrocomm, eight trucks are in transit and they expect everything to be sold.
“This is not their money, the Reserve Bank of Malawi helped them with forex, yes they may have added other resources, but we agreed,” she said.
Agrocomm Trade managing director Munawar Tebhala said he was out of the country and would respond when back in two days’ time.
On Sunday, Minister of Trade and Industry Vitumbiko Mumba lamented the apparent failure of interventions to stabilise the market, claiming some companies were hoarding cement bought using the same forex, while others were using the forex for other things.
Earlier, Consumers Association of Malawi executive director John Kapito faulted the arrangement, saying those in authority were failing to understand forces of demand and supply.
While local producers insist that their cement is pegged at K22 500 per 50kg bag on factory price, traders are selling the same at K37 000 and more.
Malawi’s three cement producers—Shayona based in Kasungu, CPL in Mangochi and Portland Cement Malawi in Blantyre—have a production capacity of 822 012 metric tonnes (MT) against an annual market demand of 1 782 000MT.
