Sinoma Cement Zambia, a part of CNBM of China has attributed the recent increase in its cement prices on the Zambian market to the high and escalating cost production and transportation in the country, saying the price of raw materials from its suppliers have also been increased.
The Zambian Business Times – ZBT team conducted a random survey on July 29, 2020 which showed that the market has experienced price changes in the last one week for all cement brands with a change of over 17% from as low as K95 per 50Kg bag to K125 per 50Kg and K81 per 50Kg bag to K119Kg respectively.
A source within Sinoma, who requested that their identity should be withheld has confirmed the development to ZBT in an exclusive interview and disclosed that a 3 weeks’ notice was given to its distributors countrywide before the new hiked price was changed during the course of this week.
The source said prices for a 50Kg bag for Sinoma Cement have increased from K95 to K119 for the 42.5R grade cement and K81 and to K114 for the 32.5N grade cement, saying the changes have been determined with regards to the current changes that the company has experienced in terms of the cost of production.
It has been noticed that cement producers has increased the price by a similar margin when they all have different cost structures, age of manufacturing plants, technology used and limestone locations which has raised suspicion with some stakeholders alleging that a cartel has been formed.
And when asked if this uniform price was negotiated among manufactures, Sinoma source could not explain this coincidence but added that the recent price changes for Sinoma were determined by the company itself and not by other brands.
“Sinoma, specifically has been challenged on production cost because we buy most of the raw materials whose price happen to have gone up as well and employees are working from home on full pay due to the Covid -1 9 pandemic, hence all this has triggered the move, otherwise I do not know about price changes with other cement brands,”
When further asked if prices are likely to increase further going forwards from the feedback from distributors who spoke to ZBT, the source explained that depending on the situation, prices may increase when things get worse or reduce if things get better.
CCPC whose responsible director has remained mute sent a whats app/sms message to ZBT through their Public Relations Officer – Namukolo Munyeme-Kasumpa that the commission has launched investigations and the investigations are still ongoing.
Some experts have told ZBT that the cement companies should be challenged to share their cost of production and pricing formulas for scrutiny but the relevant authority, CCPC, is yet to give any indications except that most of their staff are working from home due to COVID 19.
