Local cement manufacturers have blamed the increase of prices of the building material on the UMEME power outages and the Uganda Revenue Authority (URA).
The manufacturers said yesterday as they were meeting the Minister of Trade, Industry and Cooperatives Amelia Kyambadde to explain the cause of the increase in prices of the product. A 50 kilogram-bag of cement now costs Shs50, 000 in some parts of the country. Initially a bag cost between Shs35000-38000.
Representatives of Hima Cement said URA has delayed to clear its clinker (raw product for making cement). The product is held up by URA at the border, they said. She said further that government is to remove 10 percent import duty on clinker.
Morgan Gagranihe, the executive director of Tororo Cement, said that production from the company’s plant at Tororo had fallen by half to 0.6Mt per year from 1.2M per year due to power outages.
Minister Kyambadde pledged to help fast track the clearance of clinker while UMEME is to sort out the problem of power outages that are affecting production especially at Hima cement
To curb prices, Minister Kyambadde said government would start to regulate the export of cement allowing manufacturers to ration their exports to address the scarcity of the product back home. She said government would also recommend a cap on wholesale and retail prices.
Further, she said, the ministries of Trade and Energy would to fast track the mining license for limestone for Hima cement
Cement manufacturers have made a commitment, saying they will double their supply in the next three weeks
Kyambadde said if scarcity of cement persists towards mid-May, government will allow importation of cement at a special duty rate, something that local manufacturers don’t want.
Meanwhile a new cement plant- Simba Cement is to open in June 2018 and this is expected to increase production. Simba Cement Uganda Limited, is a wholly owned subsidiary of National Cement, Kenya Limited
As of March 2018, Uganda cement manufacturers had installed capacity of 6,800,000 tonnes of cement annually, with Tororo Cement taking 3.0 million tonnes (44 percent) and Hima Cement producing 1.9 million tonnes (28 percent). Simba Cement Uganda produces 1 million tonnes annually (15 percent). The remaining companies are responsible for the remaining 900,000 tonnes (13 percent).
In January 2018, Uganda’s consumption was estimated at 2.4 million tonnes annually; 35.3 percent of total annual production, although that percentage is on the rise, given the multitude of major, ongoing infrastructure projects in the country.
The remaining output that is not consumed locally is marketed to regional neighboring countries, including Rwanda, Kenya, South Sudan and eastern Democratic Republic of the Congo.