Uganda cement prices rise due to cement shortage

Cement prices in Uganda have increased by UGX5000-11,000 (US$1.35-2.98) within a month, sparking a country-wide crisis in the building sector, according to the Daily Monitor.

Pader District, some 411km from the capital Kampala, reported the highest price at UGX50,000 for a 50kg bag of cement.

The country’s two largest cement producers, Tororo Cement and Hima Cement, which supply 80 per cent of the domestic market, said the fall in output was attributable to a reduced power supply.

Tororo Cement Executive Director, Morgan Gagranihe, said the company’s production is down by 600,000t to 1.2 million which, combined with increased competition for raw material by cement producers, has constrained output. He added that the company had appealed to the government to address the issue.

Hima Cement country CEO, Nicolas George, said: “The lack of steady power supply remains our biggest challenge because our production process is power intensive; this affects production and the dispatch to the market. We are in constant engagement with [power distributor] Umeme to see how we can stabilise our supply for the long term.”

“Both Hima and Tororo have dedicated supply lines, which are efficiently running and monitored under our Automated Meter Reading technology that gives us alerts whenever there is any supply challenges,” Mr Stephen Ilungole, the Umeme spokesperson, stated. He noted that both cement plants had a stable electricity supply throughout the 1Q18. “We have made significant investments in providing dedicated feeds and lines to all the key regional manufacturing plants and entities in our effort to promote industrialisation across the country.”

Uganda currently has more electricity generated than is consumed. The country’s installed capacity is 900MW while peak demand does not exceed 600MW. Hima Cement also has an on-site back-up power plant.

Umeme has rejected the claims and said the producers were likely prioritising their cement supplies to large energy and road infrastructure projects, which assure large payments. According to Mr Ilungole, the producers are likely overwhelmed after big infrastructure projects began buying cement from them under the government-driven Buy Uganda, Build Uganda (BUBU) campaign.