The rise in cement prices on the Zambian market has resulted in a public outcry with members of the public and some retailers blaming the current price hikes on the fact that a few large cement manufacturers are colluding to maximize their profits
A random market survey conducted showed that most members of the public are negatively effected with most individuals and households involved in construction of homes and commercial building of which cement is the main material used, have had their budgets thrown into disarray. The retail prices have increased from the lows of K48 per 50kg bag to the current highs of K75 per bag in the past one week.
Retail cement dealers talked to by the Zambian Business Times – ZBT across Lusaka from Kalingalinga market to Olympia park outlets have attributed the increase in the commodity prices to the adjusted price set by Manufacturing companies. But what is suspicious is that all brands by different producers have increased by a similar margin when they all have different cost structures, age of manufacturing plants, technology used and limestone locations.
A cement retailer talked to at kalingalinga market has disclosed that the change in the price of cement has hugely affected business on the market and that it has disadvantaged most customers from buying the commodity due to the hiked prices. Most people are simply postponing their purchasing decisions hoping that the prices will revert back.
The retailers have revealed that in the beginning, only Lafarge had increased its prices but that all of a sudden, all manufactures began to follow suite, increasing the price of the commodity. The retailers also echoed concerns that the prices may be fixed through some underhand method, calling on the authorities to investigate and take appropriate action.
“We cannot hike prices of cement if the manufactures themselves have not increased, our decision is influenced by them because that’s where we buy from, hence our increment is attributed to what our manufacturers or wholesalers have put in place. We need to be mindful too that this kind of move is likely to disadvantage Zambians because there is no way foreign nationals come to invest in our country and decide to hike prices even where not necessary, a retailer told ZBT.
And in response to the public outcry on the market, Dangote Cement Public Relations Manager Mubiana Nalwendo told ZBT in an exclusive interview that company is not responsibility for increase in cement prices on the market at it has maintained its pricing and that the hike in prices may be attributed market forces that are taking effect.
Mubiana has since distanced Dangote Cement from the alleged claims of market rigging and oligopolistic behavior stating that its plant is self-reliant in terms of power production, makes its own pricing decision and it’s operations are far from key players involved at a retail end.
“We do not have any contribution the current happenings on the market and cement companies do not subscribe to one pricing mechanism, so each one sets their price depending on the production cost they incur, so these could be some of the factors that would affect the market but our pricing is the same,” he said.
He added that the company has its own transportation system with its own trucks and its in-house power plant which does not relay on the national grid, hence its business model had its own trajectory in terms of costing.
Meanwhile, when Sinoma Cement was contacted for a comment, the company confirmed that it has indeed increased its cement market prices but declined to comment on what led to such a decision by the company. Further efforts were made to contact Lafarge Cement to get their side of the story but ZBT did not get a response to the press query by press time.
