Imported cement seen nowhere in local market

August 24, 2016

IMPORTED cement is nowhere to be seen in the market after being pushed out by enhanced competition among local producers in new findings that raise doubts on the authenticity of claims of influx of imported products by local cement makers.

Our survey in Dar es Salaam revealed that cement by local producers are dominating the market particularly from the second half of last year after cement makers slashed prices of their products due to intense competition.

Hardware stores had stocked cement from Tanzania Portland Cement company, Rhino Cement and Dangote Cement.

Our reporters could not find imported cement during the survey in Buguruni, Kariakoo, Mwenge, Mbezi and Bunju areas of the city, raising doubts on the claims that imported or smuggled in cement have flooded the market, creating unfair competition with local products because they are sold cheaply.

The survey revealed there were no imported cement in hardware stores and according to traders interviewed it would not make economic sense to stock imported cement as it would not sell because prices of locally made cement have been reduced.

Some agreed to have been selling imported cement from Pakistan until last year when local cement producers lowered prices of their products in the market.

Local masons interviewed in Dar es Salaam also gave a similar picture, saying they were using local cement because their prices were now more affordable and were good in quality.

“I haven’t seen cement from Pakistan lately. We use Dangote, Twiga or Rhino,” said Mzee Elibariki Moshi, a local mason referring to cement from Dangote plant in Mtwara, Twiga brand of the Tanzania Portland Cement company and Rhino brand produced by ARM Cement Limited.

A building contractor who did not want his name to be mentioned also confirmed that imported cement was no longer in the market after local cement prices were slashed.

The Confederation of Tanzania Industries (CTI), Policy and Advocacy Director, Mr Hussein Kamote, said the cement industry has turned its focus into capturing the new and maintaining the old markets by producing high quality cement at affordable prices which have pushed out imported products.

“Some of the new players who entered the cement industry focused on producing not only high quality cement but also at an affordable prices,” he said.

The two concepts of quality and prices have automatically reduced or taken out cheap imports from Asian countries from the local market.

Instead most of the cement players were currently investing in promoting their products in order to maintain their status in the market and sustain stiff competitions. Tanzania’s cement industry has been dominated for years by three major producers, Tanzania Portland Cement, owned by a subsidiary of Germany’s Heidelberg Cement AG, Tanga Cement, majority owned by Afrisam Mauritius Investment Holdings Limited; and Mbeya Cement, owned by France’s Lafarge SA.

A team of new players include Arthi Rhino Cement, Camel Cement, Lake Cement, Lee Building Materials and Dangote Cement which have enhanced competition in the market.

However it is the coming of Dangote Cement that changed the landscape significantly after it slashed cement prices up to 10,000/- per 50kg bag last year being only months after it started operations.

Other players had to follow suit by lowering prices of their products and begin sales promotion campaigns so as to survive in the market. Local cement producers are complaining that imported cement have flooded in the market subjecting them to unfair competition since they are cheap as a result of subsidies from exporting countries or tax evasion.

Tanga Cement Managing Director, Reinhardt Swart told the Minister for Industry, Trade and Investment, Charles Mwijage in Tanga last week that they have been subjected to unfair competition in the market due to cheap imported cement that are nevertheless of low quality.

He said some of the cheap products were clinkers on transit that are diverted in local market and sold cheap because they are not taxed.

“We ask the government to either stop the imports or at least impose higher tariffs on imported clinkers… We are pleading with the government to ensure clinkers on transit reach their destinations.

This will remove unfair competition in the market,” he said during the inauguration of the second clinker manufacturing line at Pongwe area. The minister advised local cement producers they need to build a compelling case that will convince the government to act on their complaints.

The minister said that they should file their complaints at special desks on ease of doing business that have been established in the ministry in efforts of the government to improve business environment in the country.

“Let’s reason together so that we can build our case that I can defend to the government,” he said noting they need to reason together and build a compelling case on their complaints before the government.