Cement shortage: A paradox of scarcity amidst plenty

15Aug 2018
By Financial Times Reporter
DAR ES SALAAM
Financial Times
Cement shortage: A paradox of scarcity amidst plenty

TANZANIA'S construction industry is booming, helped by ongoing implementation of flagship public infrastructure projects and growth of the housing sector. But the key industry is now at risk of being hampered by shortages of its main ingredient - cement.

A slowdown in production of the building material at three major cement factories has led to shortages of the commodity over the past few weeks, pushing up prices, despite the fact that Tanzania has over-capacity in cement production.

Tanzania's cement producers have installed capacity of around 11 million tonnes per annum, against a domestic market demand of around 5 million tonnes a year in a nation with average cement consumption of 88 kilogrammes per person.

The overcapacity has in previous year resulted in a price war among cement makers, hurting their revenues and profits.

But according to a survey by the Financial Times, retail cement prices in Dar es Salaam and elsewhere have increased by more than 20 per cent from around 13,000/- per 50-kilogranne bag to between 16,000/- and 20,000/-.

 

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