Sharp rise in cement price as Dangote stops production

Wednesday November 30 2016

The then Tanzania President, Mr Jakaya Kikwete,

The then Tanzania President, Mr Jakaya Kikwete, and Mr Aliko Dangote inaugurate the Dangote cement factory in Mtwara in October, 2015. PHOTO | FILE 

By Haika Kimaro @TheCitizenTz news@tz.nationmedia.com

Mtwara. Cement buyers here are now forced to dig deeper into their pockets since distributors have run out of stock of the Dangote brand.

Sources, including wholesale and retail traders, said they were out of stock for the brand after the factory suspended production on technical grounds.

The traders who spoke to The Citizen in a survey on Monday and yesterday said lack of Dangote Cement in the market has disturbed buyers causing complaints.

The Citizen established through the survey that this development has caused a sharp rise or prices of other cement brands.

The prices have shot from between Sh10,000 and Sh10,500 to between Sh14,000 and Sh15,000 per 50-kilo bag of cement.

The cement brands still available in Mtwara include Simba, Twiga and Mtwara. Mtwara Cement is produced by a factory based here.

Wholesale trader Hassan Kioze told The Citizen that the cutting of supply of Dangote Cement has highly disrupted cement trade and construction in the municipality.

“We had developed an overdependence on Dangote Cement, which, to be fair, also led to a significant drop in prices. But now the stocks have run out,” Mr Kioze said.

He added; “Many people had started shifting from mud to modern brick houses, but now they are stuck.”

The shortage started over a month ago, traders said, and then stocks ran out completely, another trader Cathode Engelbert said.

He noted that the increase in prices of other brands of cement was due to the drop in supply. “The supply of cement has dwindled while the demand is high,” Mr Engelbert said.

“Cement from the Mtwara Cement factory is now sold at Sh15,000 from Sh10,500 a month ago. The same applies to other brands,” he noted.

Before the commissioning of the Dangote Factory in December last year, cement in Mtwara was sold at between Sh16,000 and Sh17,000.

Dangote Factory started selling a 50-kg bag of cement at Sh10,000 when the mills started rolling late last year.

Competitors were then forced to cut their prices to match those of Dangote Factory in order to remain in the market.

Advertisement