Cement makers urged to embrace innovative ways to stay competitive
Cement producers in the region have to embrace innovative approaches and technology to ensure their products are more accessible and affordable.
According to experts, proper co-ordination among producers and sustainable infrastructure development in the region will boost cement production and the construction sector in general. Experts add that innovative approaches are essential for local producers to be competitive on the regional and international cement markets.
Seelan Gobalsamy from Singapore’s Centre for Management Technology (CMT) noted that cement makers need to embrace innovative means of production because the industry is capital intensive and requires a lot of energy.
“We must ensure that we reduce the cost of production and reposition the industry to be able to meet the increasing demand of cement that is driven by the growing need for the infrastructure across the continent,” Gobalsamy said. He was speaking during the recently–ended 8th Africa Cement Trade Summit organised by CMT and the Ministry of Infrastructure.
Speaking at the event, Njambo Lekula, the managing director for international operations at Pretoria Portland Cement (PPC) Limited, a South African-based cement producer, said the growing demand of infrastructure on the continent is an opportunity for sector players to increase production. Lekula, however, argued that catering for this demand will require strong public and private sector partnerships. PPC, which is listed on the Johannesburg Stock Exchange, is majority shareholder in Cimerwa.
Demand to grow
In Rwanda, the high rate of urbanisation has resulted into increased demand for infrastructure, such as roads and power dams. The local construction sector added Rwf379 billion to the national economy last year, according to the National Institute of Statistics of Rwanda (NISR) data. Overall, construction contributed 10 per cent to the general performance of the industrial sector activity.
James Musoni, Rwanda’s Minister for Infrastructure, said embracing efficient energy options is critical to support the cement industry. Musoni said there in need to give investors more incentives and encourage sourcing of construction materials locally.
“Cement is (arguably) on the top of the list for resources needed during the development of infrastructure projects. The good news is that cement and concrete (aggregate stones) industries in Africa are the main sources of materials required to implement infrastructure projects on the continent,” Musoni said. He added that the trend is expected to continue growing over the coming years.
Though cement demand in Africa remains high, production capacity is low, and most African countries are heavily dependent on cement imports, the minister observed, adding that this calls for mechanisms to bridge the gap.
“Upcoming regional infrastructure projects, including the proposed Bugesera International Airport, and planned standard gauge railway line to connect the Northern and Central corridors, will strengthen the linkage to Africa’s East coast for cement trade purposes… Africa aims for a sustainable future, and we hope that this summit will work towards the same for the cement industry,” he said.
Call for protection
Meanwhile, sector players want more done to protect the industry from cheap importations so they stay competitive.
Patrick Mugenyi, the general manager of Hima Cement, says establishing a strong and harmonised regional policy could help protect local manufacturers from competition, especially from cheap imports. He is optimistic that the entry of South Sudan into the EAC trade bloc presents industrialists more opportunities.
Busisiwe Legodi, the Cimerwa chief executive officer, said affordable power will enable sector players to save and become competitive.
“We import most of the raw materials, including gypsum and coal, which makes business expensive. We are, therefore, positive that embracing innovative technologies will help bring down the cost of production,” Legodi, said.