Domestic cement production is below capacity

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Domestic cement production is below capacity

12:23 CAT | 06 Jul 2017

Noticias

Cimentos de Moçambique (Mozambique Cement) plants are operating below capacity as a result of a fall in demand for cement in the domestic market. Mozambique Cement plants provided 1.65 million tons of cement to the market last year, but the company has the capacity to produce twice that amount.

The director general of the company, Jorge Reis, acknowledges that rising prices have contributed to a 25 percent or so reduction in sales, but explains that the readjustment was due in part to the depreciation of the metical against the US dollar, the currency in which the raw materials for the manufacture of cement are acquired.

Reis says the continued appreciation of the metical against the US dollar may help reduce the price of cement and so stimulate demand. He estimates that this year, demand for cement will be in the region of 2.5 million tons, to be supplied by the domestic cement industry and imports.

“The lower the price of cement, the higher our sales, and our factories are prepared for it. We are not interested in selling only a little cement nor in having a high price, but in having the lowest possible price,” he said.

Cimentos de Moçambique, which has been operating in the country since 1924, has had a domestic monopoly on cement production for a long time.

“Competition is welcome as long as we all work on an equal footing and obey rules and regulations. We would be apprehensive, but we should be better than other suppliers,” Reis said.

But Reis believes that the government should adopt protectionist measures in order to safeguard the interests of domestic manufacturers, and that the domestic industry can guarantee up to four million tonnes of cement a year, completely satisfying domestic demand.

“It is up to the government to protect the national industry. Four years ago, a lot of cement was imported because the domestic industry could not satisfy demand, but now, import taxes need to increase now, because the capacity exists,” he said.

Source: Notícias