Uganda Cement price expected to drop with new plant

Monday, January 10 2011

Cement prices are expected to drop following the commissioning of a new plant by Hima Cement. The plant in Kasese District is expected to boost the construction industry with an expected drop in the price of cement as a result of increased production.

Cement, a major construction material has witnessed a volatile price trend forcing a retail price of 26,500 in the later part of December 2010.

Mr Hussein Mansi, the Larfage chairman, said the Shs280 billion plant will not only increase supply for the local and regional markets, but will also see prices become more competitive, especially if the government continues to lend support to local investors against an influx of cheap imports.

Mr David Njoroge, the general manager of Hima Cement, said with the plant already in operation, the impact of increased production from a previous capacity of 350,000 tonnes a year to 850,000 tonnes is already showing some benefits to Ugandans.

He said: “With a daily average of 500,000 bags, the price of cement has already dropped from a high of about Shs30,000 to about Shs26,000.”

“This is a good start, and as other factors that increase the cost of production get sorted, it will not be long before prices further drop.”

However, despite the increase of cement production, observers say prices must further drop in order to genuinely develop the construction.

Observers say current prices make it hard for a common man to build a house for himself. However, industry players maintain that this is a good start, which will see the cost of cement drop further as prices tagged on the cost of doing business improve.
While opening the plant, President Museveni promised to engage regional leaders on the Common External Tariff, after Mr Mansi cited it as a move that will increase regional competitiveness.

The President, who was upbeat about the number of jobs to be created also, said that by next year the cost of power will have drastically dropped, as the government commits to seeing Bujagali operational by 2012.

“Beginning next year, the cost of power will be more competitive matching that of Asia where it is cheaper.”
He also promised to fix roads and later embark on the railway construction, as he said industrialisation is the way to go.

The new automated plant, according to Hima Cement is environmentally friendly. It internally treats its emission, meaning that there will be no harmful discharge of dust to the environment.

The plant is expected to generate about Shs1 billion as the government revenue.

By Ismail Musa Ladu - The Monitor Newspaper