Why cement prices have risen sharply

Dar es Salaam. Retail prices of cement and other construction materials have increased steeply, putting pressure on real estate developers and other builders.

A random survey carried out by The Citizen in different parts of Dar es Salaam city showed that the price of a 50-kilo bag of cement has shot up to Sh20,000, from Sh13,500 in the recent past.

Cement dealers in the Tegeta area of the city complained that they have not lately been receiving regular supplies of construction materials in general – including cement – from manufacturers.

Yet, there has not been communication of any kind on what has been the reason(s) for the supplies shortage and/or price hikes.

One hardware shop owner in the area, Mr Edward Chifu, confirmed that he has not received cement from the manufacturers in the past two weeks. No doubt this has pushed up prices as customers fight over the little stock that was still available.

Mr Chifu also said that prices of iron bars has also risen from Sh16,500 to Sh20,000 for a 12-millimetre bar and Sh30,000 for a 20-millimetre bar.

“We don’t understand what is happening; but producers have not supplied us with the materials lately,” he said.

However, the Minister for Industry, Trade and Investments, Mr Charles Mwijage, has confirmed the cement shortage, saying that some manufacturers have stopped production to service their machinery.

“Manufacturers usually maintain (service) their clicker’s plants during this time of the year when there is low demand for cement,” he said, citing as an example the Dangote Cement Company, which also supplies clinker to other cement producers.

Mr Mwijage also said the situation is compounded by increased demand for new infrastructure projects.

However, the minister revealed that the Tanzania Portland Cement, Dangote, Mbeya Cement and Nyati are expected to release nearly 14,000 tonnes of cement starting from today.

Speaking to The Citizen, a builder in the Goba area of Dar es Salaam, Mr John Paul, said they were currently preparing a gravel concentrate which, by nature, could not be postponed. Therefore, they had to purchase the product at whatever price.

A Twiga Cement official who asked for anonymity because he is not the company’s official spokesperson admitted that they have stopped production for almost two weeks now due to lack of raw materials.

“We use imported clinker for production, which we have not been able to secure recently. Hence the decision to suspend production,” he said – but added that the company finally accessed the requisite raw materials at the end of last week, and expect to start production again “anytime soon.”

Surprisingly enough, though, production at Tanga Cement Plc has not been so affected. According to the company’s Corporate Communications and External Affairs Manager, Ms Mtanga Noor, cement production is ongoing.

“Our plant in Tanga has enough cement – and, as I am writing to you, there are trucks out there loading cement ready to be transported to various destinations across the country,” she said.