Tanzanian producers call for reinstatement of EACUP import duties

Cement producers in Tanzania are calling for the government to reinstate the East African Custom Union Protocol (EACUP) 2005 to protect the industry against an influx of imports.

The Guadian reported that during a half-day seminar chaired by the ministry of Transport (drawing key industry players, contractors and media representatives) local cement producers said their profits have been declining due to an influx of alleged substandard products.

Pascal Lesoinne, East African Cement Producers Association (EACPA) chairperson and managing director of the Tanzania Portland Cement Co, told the meeting that under the 2005 EACUP, scrapped in 2008, all imported cement was subjected to 55 per cent statutory taxes and duties. “But after the cement crisis that hit the country in 2008, the government issued licenses to some companies to import the product to meet the local market demand,” he said.

Tanzanian producers are now looking to market markets such as Rwanda and Uganda, due to the influx of cheaper imports which pay less than 10 per cent in duties.  “We want statutory taxes to be paid by traders operating in the country by bringing back the agreement of 2005,” Mr Lesoinne said, suggesting that the government revoke anti dumping and counterveiling duties in consultation with the cement industry.

Enkwabi Majige, commercial director of Twiga Cement, also stated that local producers are struggling to invest in the production of cement and ensure availability of the product upcountry. He said a number of the producers are likely to collapse in years ahead, subsequently affect the availability of cement in remote areas if the government does not intervene.

Furthermore, Reinhardt Swart, acting managing director of Tanga Cement, argued that the higher cost of production local producers now face (unreliability of power supply and poor transport) has been impacting competitiveness against cheap imported cement, also sold mainly in the main market of Dar es Salaam.