Cameroon: cement supply rises while price stagnates
Cement companies in Cameroon have all announced their intention to extend their factories and increase annual production to about seven million tonnes by 2018. However, the price remains disturbingly high.
It is only 18 months since the Prime Minister cut the ribbon declaring Ciments de l’Afrique Cameroun (CIMAF) officially operational in Cameroon. The Moroccan-based company has been injecting 500,000 metric tonnes of cement into the market while announcing its intention to increase this to one million metric tonnes.
According to a press statement, the company has decided to triple its production capacity by extending its factory to increase supply to 1.5 million metric tonnes by 2018.
Using the figures provided by the various cement companies operating in the country, then the 500,000 metric tonnes brought to 3.6 million tonnes the quantity of cement put into the Cameroonian market annually.
Cimenterie du Cameroun (Cimencam), last March, launched the construction of a new production factory in Nomayos, bringing to three the company’s factories in Cameroon. Cimencam says it is investing FCFA 28 billion into the project for an annual production capacity of 500,000 metric tonnes.
Dangote Cement’s factory on Douala went operational in March 2015 and is also planning to open another factory in Yaounde double production. Its present annual production stands at 1.5 million tonnes.
Estimated demand for cement in Cameroon is currently 2.8 million metric tonnes. In addition, MEDCEM, the Turkish company went operational, producing additional 600,000 metric tonnes of cement.
The plethora of cement companies is seen as a blessing to most Cameroonians but of concern is the absence of the application of the law of demand and supply whereby an increase in production entails a drop in price.
So far, the price of a 50 kg bag of cement remains at average FCFA 5,000 from all the companies. Is this an arrangement between the various companies to keep the rates at that high level? Is it a result of high taxes on input? Or, is it simply a manifestation of bad faith?