Zimbabwe Cement Industry Demands Dangote Face Import Tariffs

HARARE, Zimbabwe, Capital Markets in Africa: Zimbabwe’s cement industry has called on the government to impose tariffs on imports from international manufacturers including Dangote Cement Plc of Nigeria, which it says is undercutting local makers of the building material and threatening jobs.

The government should impose a tariff of $50 a metric ton on cement made at a lower cost in other countries and then sold in Zimbabwe, the Cement and Concrete Institute of Zimbabwe said in a presentation on Wednesday. Companies operating in the country have enough local capacity to meet demand, the institute said. Those include units of Switzerland’s Lafarge Holcim Ltd., the world’s biggest cement maker, and Johannesburg-based PPC Ltd.

Dangote Cement, Nigeria’s biggest company by market value, is a major producer of cement imported to Zimbabwe, the institute said. It’s been expanding rapidly across the continent to meet demand from governments investing in infrastructure projects, generating about a third of annual capacity from 12 African nations outside its home market. The Lagos-based company, controlled by Aliko Dangote, Africa’s richest man, imports to Zimbabwe from plants in neighboring Zambia, according to the institute.

“We don’t sell cement in Zimbabwe,” Dangote spokesman Anthony Chiejina said by phone from Lagos on Thursday. “If at all we do, it is highly insignificant.”

Zimbabwe’s trio of cement manufacturers, which also includes China’s Sino Cement, have more than enough capacity to meet requirements without additional imports, the institute said. Zimbabwe demand is expected to grow by as much as 3 percent to 1.17 million tons this year, compared with installed capacity of 1.85 million tons. The three companies have invested a combined $185 million in upgrades and cement facilities in Zimbabwe over the past five years, with PPC leading the way with spending of $133 million, according to the presentation.

Cement makers in countries such as South Africa, Mozambique and Zambia are taking advantage of lower manufacturing costs partly caused by the weakening of local currencies against the U.S. dollar, the institute said. Zimbabwe has used the U.S. dollar since 2009, when its own currency was scrapped amid hyperinflation. The importers are also benefiting from cheaper energy and labor costs than in Zimbabwe, according to the presentation.

Source: Bloomberg Business News