17 December 2012

Uganda: Contractors Applaud New Cement Investors

Kampala — Local contractors in Uganda have applauded the government for attracting more investors in the cement industry saying this may cement lower prices.

A local contractor who spoke to East African Business Week on condition of anonymity said because the country has been relaying on only two companies this has liberalized the sector for other players, a signal that cement prices will tremendously come down.

"This liberalization is a good idea for both contractors and people who want to set up houses," he emphasized.

Recently, two cement manufacturing firms have opened shop in Uganda. DAO group of investment based in Kuwait and China National Machinery Import and Export Corporation have all started manufacturing cement in Uganda, adding to Hima Cement Factory and Tororo Cement factory in Eastern Uganda.

He advised existing cement manufacturers to strategize for competition by improving on the quality of their cement, upping their marketing gimmicks as well as lowering on the prices.

Peter Mubiru of MRE Company told the EABW that the move to attract more cement investors will spur development of real estate and roads construction sector.

"The two cement companies have been over exploiting us," noted Mubiru.

"Because they change cement prices day and night," he added.

The contractors' comments come at a time when two new cement manufacturers have declared interest to open cement factories in Eastern Uganda.

Kuwait based cement manufacturer, owned by the DAO group of companies are setting up a factory in Budaka, which will produce 750 metric tons per day and it expected to increase to 5000 metric tons of cement annually in the long term.

Also Chinese's firm China National Machinery Import and Export Corporation (CMC) has picked interest to open up a cement factory in the remote region of Karamoja and work is expected to start in the first half of 2013.

The coming of more investors in the sector is seen as an engine to drive economic development in other parts of the country. These parts, like Karamoja, were previously neglected.

"When such investments come to a region like Karamoja this will drive other investors to develop the spirit of investing in the region," said Moses Nakapit a youth from Karamoja.

Robert Ssenyonga a Consultant Accountant and also an Economist told EABW that when local communities access cheaper cement, it can drive the development of the real estate sector by erecting more hotels to cater for tourists.

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