The fall in the price of cement on the Mozambican market after the Chinese investment in a new factory, Dugongo Cimentos, in Matutuine district, was expected by the government, the Minister of Industry and Trade has told reporters.
"We, as a government, know what we're doing," he said. "We have our regulations and we have a responsibility to the business sector and to the Mozambican people. We have been saying, with regard to cement and to other industries, that we have to assess the costs of production to arrive at adequate profit margins and a reliable final price," said Bur Mesqita, Minister of Industry and Trade.
Despite the rage of some of Dugongo's competitors, the minister pointed out that it was simply the economy was reacting to the increased supply of cement with a reduction in prices.
"Unlike the other companies, Dugongo uses Mozambican raw materials,“ Mesquita added, "and it also sells to its competitors." Dugongo is the only company in Mozambique that produces clinker and therefore the other companies must either buy clinker from Dugongo or import it.
According to a report in Monday's issue of the independent newssheet "Carta de Moçambique", Dugongo cement is sold for between MZN220 and 255/50kg bag (US$3.48-4.04), while the price for cement from its competitors is between MZN260-280. Before the Dugongo factory began production, a 50kg cement bag could cost as much as MZN720.
