Big projects in Rwanda drive demand for cement as retail prices rise

Sunday April 8 2018

Cimerwa cement factory in Rwanda.

Cimerwa cement factory in Rwanda. Increased demand has resulted in a sharp rise in the price of the commodity in the country. FILE PHOTO | NATION 

By KABONA ESIARA
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Shortage of cement at distribution points is expected to continue and retail prices will remain high until the end of April 2018 when regional manufacturers resume production.

But the market should brave for a longer cement shortage as domestic manufactures say large infrastructure and real estate projects in the country will exert more pressure on their capacity.

“The maintenance of Cimerwa factory is expected to continue for the next three weeks,” said Bheki Mthembu, chief executive of Cimerwa.

Mr Mthembu said the expected surge in demand for domestic cement will force the company to cut supplies to distributors in order to satisfy demands from infrastructure projects.

“Large infrastructure projects in East and Central Africa are going to be the drivers of demand for cement,” added Mr Mthembu.

Infrastructure projects

The demand from the infrastructure projects means that in order to stay in business, the distributors will have to rely on imported cement from Uganda, Tanzania and Asian countries.

While the value and volumes of cement that the new projects has not been made public, the Rwf355 billion ($418 million) Bugesera International Airport, it is estimated that the project could consume 50,000 tonnes of cement annually.

Another project, which is poised to consume tonnes of cement is being carried out by Savannah Creek Development Company, a real estate investment vehicle created by Gold Capital Investments.

Denis Kalera, a local partner in Savanah Creek Development Company said they plan to construct 550 mid and high-end houses on a 35 hectares of land in three cells —Kangondo I, Kangondo II, and Kibiraro in Ntaruarama slum, popularity known as Bannyahe.

“The total project cost is estimated at Rwf47.6 billion ($56 million). The project combines the development of Busanza low-cost housing estate, which is estimated at Rwf10 billion ($12 million),” said Kalera.

The construction of 1,024 housing units in Busanze in Kanombe was commissioned on March, 2018.

The estate in Busanza will have important amenities for occupants such as playing areas, a modern market, a workshop hall for people to practice different crafts as well as a central sewerage system.

After completion of Busanza, Savannah Creek Development Company will embark on the construction of high-end houses in Nyarutarama estate.

The Rwf76.6 billion ($90 million) redevelopment of Kimironko Market will also be commissioned in September.

The project, which is sponsored by Gasabo Investment Company — a joint venture between Rwandan and United Arab Emirates investors — will be developed on a 5.6 hectares of land surrounding the current Kimironko market.

The project involved the construction of a modern bus terminus, which can accommodate 120 buses per hour and 2,000 cars, a modern market, a four-star hotel and 120 apartments.

Industrial players are betting on cement imports from the region to meet the expected demand as Rwanda remains a net importer of cement.

Data from Rwanda Revenue Authority shows that last year, at least 79,573 tonnes of cement was imported from Tanzania and an additional 164,814 tonnes were imported from Uganda.