THE Government has resolved to immediately scrap restrictions on the importation of cement to address domestic market shortages and curtail the rapidly rising prices, a Cabinet Minister has said.
Contributing to a Parliamentary discussion on the cement supply constraints and sky-rocketing prices, which have gone up by 40 percent in the last two months, Minister of Skills Audit and Development, Professor Paul Mavima, standing in for the Leader of Government Business in the Lower House on Wednesday, said the decision was in response to the escalating demand and prices.
Cement prices have risen to about US$17 for a 50 kilogramme bag from about US$12 in August this year.
Industry players partly attribute the sharp price increase to a combination of high demand and subdued imports after most dealers reportedly exhausted the quotas prescribed by their import permits.
The situation has led to an escalation of budgets for construction projects, posing serious challenges to their completion.
Zimbabwe’s cement demand continues to grow, driven by Government infrastructure projects and individual home building, with consumption reaching about 1,6 to 1,8 million tonnes annually.
“This is a matter that the Cabinet discussed yesterday (Tuesday),” Professor Mavima, who is a Member of Parliament for Gokwe Sengwa constituency, said.
“The factors are many, but there is also an increase, a boom in the construction industry, including residential construction and other structures that are going up, which is contributing to this shortage. The Cabinet took a decision yesterday to open up the importation of cement and this is supposed to be with immediate effect.”
While Zimbabwe primarily imports cement from neighbouring Zambia, these inflows have dropped sharply as some major importers exhausted their allotted import quotas, effectively squeezing external supply just as domestic need accelerated.
Despite some dealers still having valid import licences, Deputy Minister of Industry and Commerce Raj Modi informed the House of Assembly that the permit holders are facing delays at the border. He stated that there was a significant backlog at the border posts, leading to severe delays in the clearance of imported cement.
“Some people imported the cement, but it is still at the border; they have not yet been cleared,” he said.
Furthermore, Deputy Minister Modi highlighted domestic production constraints, specifically mentioning the shortage of clinker, the primary input for cement production, and recent breakdowns at local cement production facilities.
Despite Zimbabwe’s cement industry possessing an installed production capacity of about 2,6 million tonnes annually, output has been volatile as some major producers struggle with various operational setbacks, including crippling power shortages and aging equipment.
Khayah Cement, in particular, has faced financial distress and production stoppages, further reducing local stock.
The market remains tight, putting pressure on large infrastructure projects and individual builders alike.
Relief, however, may be on the horizon as ongoing investments aim to boost capacity.
The new Huaxin cement plant in Chegutu is expected to commence operations during the first quarter of next year, producing about 800 000 tonnes per year at full capacity.
Zimbabwe’s major cement producers include Khayah Cement in Harare (formerly Lafarge Cement Zimbabwe), PPC Zimbabwe in Harare and Bulawayo and Sino-Zimbabwe Cement in Gweru. Another significant player is the Chinese-owned Livetouch Cement in Red Cliff, near Kwekwe.
