19 December 2012

Zambia: Construction Triggers Growth in Cement Prices

RAPID growth in the construction sector and the temporary disturbance in production at Zambezi Portland Cement Factory in Ndola, coupled with high demand in the export market, have contributed to the sudden increase in the prices of cement on the local market.

The National Council for Construction (NCC) has said cement on the local market which previously fetched K52,000 per 50kg pocket is now hovering between K70,000 and K80,000 on the black market.

The situation has brought panic in the construction industry.

NCC chairperson Levy Zulu said the Government's decision to invest in the multi-billion Kwacha Link Zambia 8,000 Road Construction project had also contributed to the high demand of the commodity, thus pushing the prices high.

Cement is one of the major building materials used in the road construction industry.

Mr Zulu, who acknowledged that Zambia was currently experiencing a sudden growth in the construction industry, however, advised cement manufacturers and retailers not to take advantage of the situation to make unnecessary profits.

"Cement is the vital ingredient used in the building industry and unjustified increases in the prices of this commodity by retailers can lead to skyrocketting costs of other aspects of the construction industry," he said.

Mr Zulu said NCC was calling for more players to join the cement manufacturing industry to avoid a situation where a few were taking advantage of the situation to hike the prices.

He expressed optimism that the coming on board of the Nigeria-owned Dangote Cement Company, whose plant was still under construction in Ndola, would help stabilise cement prices in the country.

Zambezi Portland Cement, one of the country's leading cement manufacturers, also acknowledged the high demand of the commodity but said the shortage was artificial because the company had continued to meet its daily production target of 1,700 tonnes per day.

Company operations manager Mwamba Kayula said in Ndola yesterday that ZPC would soon increase its production capacity by up to 40 per cent.

Mr Mwamba said ZPC had not increased the prices of cement it was producing for the local and export markets.

He said 30 per cent of the cement produced at ZPC was exported to neighbouring countries such as the Democratic Republic of Congo.

"We are planning to increase our daily cement output by between 30 and 40 per cent because there seems to be a sudden increase in the demand for cement in the country," he said.

Mr Kayula admitted that the recent disturbance in the distribution cycle and the wrangles surrounding the shareholder structures at the company had slightly affected the ZPC cement distribution network.

Ndola's Blockman Concrete Manufacturers managing director Lwipa Puma said there was high demand for cement which had created an acute shortage of the commodity in the construction industry.

Zambia Institute of Architects Copperbelt chapter chairperson, Dixon Bwalya said the cost of construction would soon go up because of the rise in the prices of cement.

Mr Bwalya said there was need to ensure that prices of cement stabilised to enable the construction industry to continue contributing to the country's economic development.

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