Cement company denies increasing prices

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Cement company denies increasing prices

7:45 CAT | 06 Mar 2018

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The company Cimentos de Mocambique (CM), which operates two cement factories in the northern province of Nampula, has denied authorising any increase in the price of its product.

At a Nampula press conference on Sunday, Jorge Reis, the managing director of CM, said his company has nothing to do with the sharp increases in the price of cement charged by retailers.

Over the last two months the price of a 50 kilo sack of cement produced at the CM factories in Nacala has risen from 470 meticais (about 7.7 US dollars) to a maximum of 610 meticais. Formal and informal retailers in the provincial capital, Nampula city, justify the price rise, citing an alleged shortage of cement and difficulties in acquiring it at the factory gate.

Reis said it was true that over the festive season “we had less cement in the warehouses”, but now “the truth is we are producing 30,000 tonnes a month, and we are selling 30 per cent less than this”.

At the factory gate, Reis added, CM had not raised its prices – in fact the price had remained unaltered since November 2016. Depending on the type, a sack of cement bought at the factory gate costs between 350 and 409 meticais, for clients who buy a minimum of 600 sacks.

Reis said the company is trying to make its procedures more flexible to reduce the time clients have to wait before they can pick up their cement.

“We have the capacity to load 35 trucks a day, but what happens most of the time is that ten truck appear all at once, which implies several hours of waiting”, he added. He pointed out that, although the factories work 24 hours a day, “clients never appear during the night”.

Reis said one of the main problems CM faces in Nacala is the irregular supply of electricity. “Power cuts, even if they only last for a short time, cause a great disturbance in our production mechanism”, he said. Contacts are under way between CM and the electricity company, EDM, to persuade the latter to improve the quality of the power it provides.

The Provincial Director of Trade and Industry, Norberto Narciso, told the reporters that the CM information would be shared among businesses in Nampula, and in the neighbouring province of Niassa, which also acquires cement from Nacala.

He promised that the government’s National Inspectorate of Economic Activities (INAE) will check the retail price of cement to see whether the retailers are respecting the recommended profit margins.

Source: AIM