Shortage of cement Jolts govt into action

Ministry of Trade and Industry has issued 30 import licences for cement to close the supply gap and curb escalating prices amid shortage of the commodity on the market.

Business Review has established that the import licences issued will enable traders import an estimated 375 000 metric tonnes (MT) of cement from neighbouring Zambia, Mozambique and Tanzania.

But the projected imported tonnage is below the estimated country’s annual deficit of 959 988 MT, according to Ministry of Trade and Industry data.

According to the data, annual production capacity of the country’s three local cement producers, Shayona Cement Corporation in Kasungu, Cement Products Limited (CPL) in Mangochi and Portland Cement Malawi in Blantyre stands at 822 012 MT against an annual market demand of 1 782 000 MT.

Speaking in an interview on Tuesday, Ministry of Trade and Industry spokesperson Mayeso Msokera said while the local manufacturers are being prioritised for forex allocations to enable them bring adequate raw materials for production of cement, they will continue to issue import licences to traders who are able to source imported cement to supplement the deficit from local production.

He said: “Since the time we noticed shortages [last month], we have issued licences to about 30 eligible importers to bring cement.

“The licence is valid for one year, but it also has a limitation on quantities assigned to a trader.”

Msokera said want they production of cement to stabilise as manufacturers are prioritised in terms of foreign exchange availability.

In the long-term, he said the ministry, through the Malawi Investment and Trade Centre, seeks to facilitate more investment and expansion of local cement production capacity.

Following the shortage of cement on the market attributed to lack of foreign exchange for importation of key raw materials, consumers are now buying a 50 kilogramme (kg) bag of cement at K19 000 against the retail  recommended price of K12 000.

As at August 2 2023, published data from the Ministry of Trade and Industry showed that Shayona Cement Corporation’s Build Plast costs K9 500, Akshar costs K10 793 while Thanthwe costs K11 566.

For CPL, Nkope fetches K10 252, Njati K11 417 while Njati Extra fetches K12 465 per 50 kg bag.

On the part of Portland Cement, Khoma costs about K9 000, Duracrete fetches K14 000 while Superset is pegged at K15 000.

Meanwhile, the National Construction Industry Council (NCIC) said cement shortage has a negative impact on project timelines as well as budgets with the commodity cost variations.

Said NCIC corporate affairs officer Lyford Gideon: “NCIC is fully aware of the impact that this shortage is having on the industry as it is one of the major inputs in construction works.

“However, we are hopeful that these challenges will be addressed by relevant stakeholders.”

Speaking separately, Roads Authority spokesperson Portia Kajanga said the shortage of cement could lead to delays in completion of some projects, which might attract an increase in final costs of projects due to prolonged stay of contractors on sites.

This, the authority said, could also pose challenges to accessibility of some areas.

Said Kajanga: “Construction of bridges, culverts and other drainage structures heavily relies on cement, such that its scarcity has a direct impact on the timely completion of such structures on the various projects currently running.

“And with the annual rains three or four months away, most contractors are concentrating on completing construction of such drainage structures [bridges and culverts] in order to complete the works before the onset of the rains.”

Consumers Association of Malawi executive director John Kapito said although prices have gone up “considerably”, consumers are waiting longer to access the commodity at exorbitant prices.

“Those that were in big construction have had to lay off people,” he said.