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Rwandan cement maker expects market to stabilise after plant upgrade

Rwanda’s biggest cement producer CIMERWA expects an upgrade of its production capacity will help to stabilise the market after shortages sent the price of a bag of cement up nearly 50 percent.

Bheki Mthembu, the chief executive of CIMERWA, told Reuters in an interview late on Monday the company carried out maintenance and upgrade works on its plant in April and May, which had now been completed.

That caused severe shortages of cement and sent the retail price per 50 kg bag to above 13,000 francs ($14.86) from 8,700 francs.

“The plant operation is back to normal but what may not necessarily be back to normal is all consumers of cement getting their products,” he said. Production is currently running at 1,300-1,500 tonnes per day, up from 1,000-1,200 tonnes a day before the upgrade, the CEO said.

“With at least 1,300 tonnes a day it should go to normal prices.”

A construction boom in Rwanda has driven up demand for cement as the government builds roads, power plants and a new international airport. Private developers have also been building new houses and office blocks.

Mthembu said demand was growing at 7-8 percent annually as new building projects come up. Rwanda also imports cement from neighbouring countries like Uganda and Tanzania.

The company is 51 percent owned by South Africa’s PPC Ltd and has an installed annual production capacity of 600,000 tonnes. The rest of the shares are owned by the Rwandan government.

The $3.3 million maintenance and upgrade programme at CIMERWA’s plant will help to boost annual cement production to 500,000 tonnes from 400,000 tonnes.

But in the meantime, cement shortages have made life difficult for retailers and customers.

“The cement from CIMERWA is not available and besides it is still expensive,” said Claude Nshimiyimana, who sells cement in the south of the country.

Some consumers said the high prices had discouraged them from buying cement in bags, opting for the more affordable smaller amounts.

“I cannot afford that price so I have to buy per kilogram,” said a consumer who was buying four kilos of cement at 300 francs each and did not wish to be named. ($1 = 874.8525 Rwandan francs

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