A Copperbelt based cement distributor has accused cement companies of forming a cartel that agreed to increase market prices simultaneously so that they can maximize their profits.
Speaking in an exclusive interview with Zambian Business Times – ZBT, a concerned Copperbelt based distributor whose name has been withheld said that a cartel has been formed by these cement companies because it’s odd that they all increased their prices at the same time.
“We first as distributors received the sms notification from Dangote that they are increasing, then Lafarge followed and then Sinoma, just like that. And it was all happening within a space of about two to three weeks”, he lamented.
The cement distributor furthermore said that the basis of increasing the cement prices that has been given so far is not satisfactory, it is not justified because most of the input material like limestone, energy, gypsum are all sourced locally. Moreover, fuel and the Kwacha to US dollar exchange rate has remained stable.
Although I am a distributor, I’m personally not happy because this is unacceptable and is exploitation of the local Zambian market. There is no fuel price hike and the dollar is stable, so what is the justification of their increment?. Everybody is affected with COVID-19, but how much of imported material do they use, most of it is local. And they have increased by over K20 or US$1 per 50kg bag.
Furthermore, he said that the cement factories have hiked their cement prices simultaneously and wonder where the people who are supposed to stop this vice are. “You know the sad part is that everybody has increased their prices simultaneously. So where the authorities and what are they doing about it?
“Everybody needs cement. For example in Chipata the price of cement is almost K135 per 50kg bag of 32.5N, How about Mongu and Mansa?! now some are even selling at K140 per 50kg bag,” the source told ZBT.
Another sourced asked that CCPC should review all most recent price increases and see which CEO tenor coincides with these increments. There are certain things that are connected, with serious investigations, this whole increment will unravel the people behind it.
The source told ZBT that it is unacceptable and defeats the whole purpose of having more players in the cement industry. We were told that with more cement companies coming on board, there would be competition, and that will bring the prices down but look at where we are now.
As a distributor, I have spoken to other citizens and there is strong suspicion that there is a cartel formed. We are just wondering where the authorities are and organizations like the Competition and Consumer Protection Commission (CCPC) are doing about this.
CCPC confirmed to ZBT that they had instituted a formal investigation that is targeted at four cement companies. The companies include Dangote, Lafarge, Zambezi Portland and Sinoma (Mpande Limestone).
CCPC did not however give timelines on when or how long this investigation would take before an offices update is given to the nation. CCPC Executive Director told ZBT that the investigations are at a delicate stage and he would announce details at an appropriate time.
