Govt moves to protect local cement manufacturers

Government says it plans to collaborate with the private sector in establishing the Anti-Smuggling Committee as a measure to curb the smuggling of cement and other products into the country.

The move, aimed at protecting the local manufacturers, has come at a time when local cement manufacturers have been crying foul over the influx of imported and cheap cement products such as Dangote Cement from Zambia

Local cement manufacturers want product to be protected

The manufacturers, such as Shayona Cement Corporation, LafargeHolcim Malawi and Cement Production Limited (CPL) corroborated in recent interviews that the influx of foreign cement products is suffocating their businesses and called for government protection.

Ministry of Industry Trade and Tourism spokesperson Mayeso Msokera said Wednesday government has been advocating for the growth and development of local industries; hence, the move to protect them.

Apart from establishing the committee, he said under the Buy Malawi Strategy (BMS), government continues to encourage consumers to sample locally produced cement, among many other products, as in doing so would promote local industries.

 “We have noted that some cement is smuggled into the country as well and, as government, we are considering additional measures of curbing smuggled products including cement into the country. For instance, efforts are under way to establish an Anti-Smuggling Committee,” Msokera said.

He said the influx apart from triggering business loses for manufacturers, has also been leading to job losses as companies have been laying-off staff to keep afloat with the market situation.

“The committee will involve both government and private sector stakeholder institutions so that issues of smuggling are addressed. We would like to appeal to the private sector to work with government to root out this malpractice [of importing cement]”.

Shayona Cement director of Human Resources and Administration Austin Mvula said government needs to quickly employ measures that protect local cement manufacturers as the firms contribute to the economy through employment of citizens and paying corporate tax.

 “We lost about 150 employees in July last year because, among other things, we felt we could not run two cement manufacturing plants when there is no enough market due to the influx of imported cement. The influx impacts on the local citizen and the economy as we are forced to scale down operations.

He said the company has a capacity to double its current 18 000 bags produced per day if there can be a guarantee that the products will be sold but with the influx of foreign cement, the company is cautious.

However Msokera clarified that government cannot entirely ban cement imports as it has the mandate to balance the needs of both the producers and the consumers with regard to availability of essential commodities such as cement.

“Government introduced import licensing to regulate cement trade and stabilise its supply and price. It is important to note that import licensing also serves as a way of protecting the local cement industry and all other industries.

“The ultimate goal of licensing cement is to safeguard stable supply of the product and the prices. This is done to avoid occurrences like what happened in 2017 whereby the domestic market experienced scarcity of cement which led to unjustified spikes in cement prices from an average of K6 000 per 50kg bag to K12 500 perpetrated by unscrupulous traders who took advantage of the shortages in domestic supply,” he said.

Economics Association of Malawi (Ecama) president Chikumbutso Kalilombe while agreeing with government interventions on the matter urged government and manufacturers to have an interface to jointly find solutions on how best to resolve the issues. n

Share This Post