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Zimbabwe hit by serious shortage of cement, PPC fails to meet orders

by Staff reporter
25 May 2021 at 13:48hrs | Views
Zimbabwe has been hit by a shortage of cement, leaving the construction industry stranded, while in some instances resorting to the black market.

The country implemented a cement import ban (SI 89 of 2021) has been implemented and has sparked fears that the move might trigger collusion among local cement producers, causing prices increases and cement shortages.

A snap survey by this publication showed that PPC was out of stock in most retail outlets and building material warehouses in most towns and cities. Retailers that spoke to this publication claim to have paid for cement a month ago and they are still waiting for their orders to be delivered. Efforts to contact PPC Zimbabwe to ascertain reasons behind the none delivery of the product were fruitless.
Hardware outlets said supply delays were resulting in a huge increase in demand for the product.
"The shortage of cement will sabotage the growth of the economy especially during the COVID-19 pandemic," said a shop attendant at a hardware shop.

PPC and Lafarge control more than 70 percent of the country’s cement market.

While the Gweru based Sino-Zimbabwe Cement Company, has about 25 percent market share.

Cement is usually in high demand in summer.

The country's cement industry has the capacity to produce over 2 million tonnes of cement per annum, adequate to satisfy the current market demand estimated at 1,3 million tonnes.

The shortage of cement could have far-reaching implications on the construction industry.

The Ministry of Transport and Infrastructural Development recently embarked on a roads rehabilitation programme after allocating money to all provinces to resurface and reconstruct roads, while in some cases putting tarmac.

The works could be affected if the shortage of cement continues.

Suspicion by retailers is that the country’s major cement makers, among them PPC, Lafarge and SinoZim are failing to meet this demand as they do not have enough foreign currency to attend to repairs at their plants and to import critical inputs.

PPC Zimbabwe last month had planned annual kiln maintenance undertaken at its Colleen Bawn factory and after that everything just went south.

In 2017, PPC Zimbabwe commissioned a USD 85 million Harare milling plant in anticipation of upsurge in the cement demand. This investment has allowed the company to fully serve the growing northern market of Zimbabwe better.

Retailers suspect that the kiln maintenance at the Colleen Bawn plant could have resulted in a backlog of clinker, the main ingredient. "While the kiln is now back online, the company may have to import clinker to clear the big backlog. But that may not be easy, given the foreign currency crisis," said one commentator who refused to be named.

There are several reasons why demand has gone up. There is a rise in construction activity due to increased mortgage financing for private home builders and a rise in public infrastructure activity, such as roadworks. But a lot of the high demand is also being driven by speculative buyers loading up on cement and other construction materials to hedge against inflation.

Sino Zimbabwe, which runs a cement plant in Gweru, sources 85 percent of its inputs locally. However, the remaining 15 percent is made up of critical spares, packaging and other consumables.

At some point in the past, PPC had to suspend production due to a shortage of imported grinding aid, which is used in the process of reducing the hard clinker into fine cement powder.

The industry is dominated by PPC, Lafarge and Sino Zimbabwe Cement. PPC has capacity of 1.4 million tonnes from its plants in Bulawayo, Colleen Bawn in Gwanda, and at its $82 million Harare factory. Lafarge has installed additional capacity, while Sino Zimbabwe can produce 300 000 tonnes per year.

Smaller players have recently entered the market, including Chinese company Livetouch, which recently started production at its $20 million Redcliff plant.

Combined, the companies have the capacity to meet annual national cement demand, estimated at 1.4 million tonnes last year. Both PPC and Lafarge are exporters. PPC exports 2 percent of its capacity into the region, supplying markets such as Botswana and Malawi.

Source - Byo24News

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