Cement shortage overcome as imports clear backlogs

Source: The Herald – Breaking news.

Wallace Ruzvidzo

Herald Reporter

Cement shortages are being overcome following the importation of 149 000 tonnes using free funds from individuals and companies seeking cement, thus clearing the backlogs, as the special Government import scheme set up to break artificial shortages and price gouging is bearing fruit.

The cement was imported after Government approved 665 applications for cement imports from manufacturers, wholesalers, retailers and those in the construction industry wanting to ensure direct supplies, although only 332 of them have so far been collected for use.

Consequently, prices have decreased from as high as US$20 at the beginning of this month to about US$11 as the scarcity pricing was killed off.

Speaking after yesterday’s Cabinet meeting in Harare, Information, Publicity and Broadcasting Services Minister Dr Jenfan Muswere said the supply gap would significantly decline starting next week as the imports reach users.

Industry and Commerce Minister Dr Sithembiso Nyoni updated Cabinet on the measures being implemented to address the current cement shortages on the local market. 

“As at November 15, 2023, 665 applications for cement import had been approved amounting to 149 000 tonnes to ease cement shortages and clear backlogs that had been created in the market.

“Of the 665 approved applications, only 332 import licences were collected. The approved applications are for manufacturers of cement, wholesalers, and retailers as well as companies in the construction industry.”

Those in the industry are still allowed up to the end of the year to import cement using their own free funds, said Minister Muswere. Individuals will also be allowed by Zimra to import a maximum of 5 tonnes each, 100 bags of 50kg, for personal use. 

While the opening of imports by Government is restoring supplies, Minister Muswere reprimanded errant players in the industry who caused the problems in the first place, saying decisive action would be taken against them.

“Government continues to review the current cement supply situation and will take decisive action against errant industry players. Government would also like to assure the public that it has given an ultimatum to players to review their supply and pricing models,” he said.

In a statement yesterday, the Ministry of Industry and Commerce said the cement import permits were not transferable through resale or any other means. They had to be used by the applicant only.

“Members of the public are hereby advised that the cement import permits issued by the ministry belong to the licence holders and are not to be resold or transferred over to any other party,” said the ministry.

Turning to the fertiliser supplies, where the growing demand as farmers continue to grow more crops on more land had gone beyond the ability of the local industry to supply enough, Minister Muswere said Zimbabwe will import fertiliser through several schemes to alleviate potential shortages. 

“To alleviate the current shortage of fertiliser, the country will import through a variety of potential schemes; the Dorowa Shawa Hills Project; and Wonderful Group of Zambia Joint Venture with Rusunguko/Nkululeko Holdings. The joint venture is expected to bring in 50 000 tonnes of basal fertiliser and 50 000 tonnes of ammonium nitrate.

“The country is reported to have 77 483 tonnes of stock and 354 700 tonnes in Collateral Management Agreement which requires US$460 million to unlock the stocks. Cabinet advises that the local fertiliser industry has an installed annual production capacity of more than 2 million tonnes of compound and blends. The industry is currently operating at 30 percent and the supply gap is being covered by imports,” he said.

Dr Muswere went on to outline other measures to ensure local production of fertiliser.

“On innovative measures for local production of unique varieties of fertiliser; Cabinet advises that there is a coal-to-fertiliser project which is being pursued by Verify Engineering. Sable Chemicals (Pvt) Ltd is currently exploring the option of local ammonia gas production. The processes will use locally available coal to develop ammonia-based fertilisers, thereby fulfilling fertiliser requirements. The company is also exploring the production of ammonia gas using natural gas sourced from Muzarabani. 

“Furthermore, Sable Chemicals also signed a memorandum of understanding with Invictus Energy which will enable the company to produce 240 000 tonnes of ammonium nitrate fertiliser and 360 000 tonnes of urea. Sable is also pursuing the option of local ammonia gas production which includes the production of green ammonia using solar as the primary source of power. 

“Additionally, other innovative measures which will be used to mitigate both the increased volumes and funding requirements for fertilisers will be to use super grades of fertilisers such as Super D instead of Compound D or Urea in place of ammonium nitrate. A comprehensive plan of production is underway,” he said.