Rwanda’s construction sector is set for good times with the anticipated reduction in the prices of cement early next year, when Cimerwa Ltd increases its production capacity six fold.

The country is currently facing a huge cement deficit, which has resulted in firms importing the commodity from neighbouring countries. The upgrade by Cimerwa Ltd — the country’s largest integrated cement manufacturer — will result in the construction sector not needing to import cement.

The current annual demand for cement is estimated at 350,000 tonnes while Cimerwa’s capacity stands at 100,000 tonnes per year but it will increase to 600,000 tonnes next year. Based on the positive economic outlook for the Great Lakes region, cement demand is projected to increase to 1,000,000 tonnes in the next ten years.

The increased capacity should bring down costs for construction companies and individuals building commercial and residential houses. Currently, a 50kg bag of Cimerwa cement costs Rwf11,000, while imported Hima cement is selling at Rwf9,000 (Rwf12).

READ: Rwanda tax on raw materials to affect price of cement

Although Cimerwa is yet to communicate what the new price will be after the increased supply, it is assuring the market that the new prices will be competitive.

“Cimerwa wants to offer competitive prices for the Rwandan construction market. This should help stimulate the sector as construction materials in Rwanda have been expensive,” said Samuel Kasule, head of commercial services at Cimerwa Ltd. Cimerwa, which is majority-owned by Pretoria Portland Cement Company Ltd will also export to the region.

Rwanda imports its cement mostly from Uganda. With the increase in production the country plans to export to Burundi, DR Congo and northern Tanzania.

However, Cimerwa’s products are still considered low quality compared with imported cement, with some firms choosing to import for their construction needs. Cimerwa however, said its cement was not of low quality but could not meet quantity demands for large construction projects.

The anticipated price reduction in Cimerwa’s product comes as imported goods like Hima cement face new import tax. Hima cement protested a 25 per cent tax imposed by Rwanda Revenue Authority (RRA) on all imports coming into the country under the duty remission scheme.

Under the duty remission scheme, all goods whose raw materials were imported from outside the East African Community and thus exempted from import duty, were subjected to tax once the final product was manufactured and sold.

All goods manufactured and whose raw-materials are extracted from within the EAC region are not subject to taxes if sold within the block. Hima is accused by RRA of importing clinker a raw material used in making cement from outside the region.

Hima denies importing the raw material from outside EAC and says the new tax is unfair and could hinder its business in the country.

“We don’t import our raw materials actually we make clinker from our premises in Uganda that is why we appeal to revenue authority in Rwanda to verify this before imposing this tax which could affect our operations in the country,” said Mr Jimmy Mugabo, the Hima cement Country Manager for Rwanda and Burundi in an earlier interview last week.