Low cement supply, rising demand sees prices go up in Rwanda

Sunday April 1 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 

ROBERT MBARAGA
By ROBERT MBARAGA
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The narrowing supply of cement amid a backdrop of increased demand has resulted in a sharp rise in the price of the commodity in Rwanda, with manufacturers blaming the fluctuation on speculations by some players in the supply chain.

A mini survey by Rwanda Today shows that a bag of Cimerwa and Hima cement, which was sold for between Rwf8,500 ($9.8) and Rwf8,700 ($10), is now being sold for Rwf11,000 ($12.7) - Rwf12,000 ($13.8).

“We are buying cement at Rwf10,500 ($12) from wholesalers,” said Aliane Kanzayire, a cement retailer in Kicukiro.

The trader said there has been an acute shortage of cement supply for the past three weeks, forcing some traders who had stock to increase the price.

According to sources, the shortage was triggered by maintenance shutdowns at the two main cement market feeder, Cimerwa and and Ugandan-based Hima Cement, affecting production for the past three weeks.

“Yes we have been shutdown because of maintenance of one of our mill, but we are now done with the maintenance work,” said Bheki Mthembu, the CEO of Cimerwa.

However, despite the shutdown, Cement manufacturers said the price of cement has not been increased formally and so any fluctuation is due to speculation.

The Ministry of Trade said it was informed about the price hikes on Monday March 26 and had convened a crisis meeting to address the issue.

“We have a meeting with players in the sector and so we will get to find out what is behind the price increase and how to remedy the situation going forward,” said Vincent Muneshyaka, Minister of Trade and Industry.

There is only one cement producer in the country — Cimerwa — and so there is an over-reliance on imports from neighbouring countries.

The establishment of the country’s second cement producer, Kigali Cements Company, has been interrupted by a combination of lack of raw materials and an ongoing legal tussle with the former owner, Rwanda Enterprise Investment Company.