Rwanda: Needs More Cement Than Ever Before as Housing Booms

Byszheng

Updated Thu, 30 Apr 2015 15:47:26 GMT

Rwanda has become a regional hotspot for cement producers. Cimerwa, a local cement producer has failed to meet the demand, thus giving room for neighbouring cement manufacturing giants to penetrate the growing Rwandan market.

"Cimerwa has failed to meet our demand," said Jean Pierre Birimoyezu. Yet, the demand is unquantifiable.

According to the 2012 Population and Housing Census, about 91% of Rwandan homes are built with walls made of either sun-dried bricks or mud. Durable building materials made from cement are expensive and thus less affordable to the majority of the Rwandan population.

Wholesale price for a 50kg bag of Uganda's Hima cement producer, costs Rwf6000 ($8.5) and Rwf9100 ($12) retail price. But Cimerwa, 51% owned by South Africa's Pretoria Portland cement, sells the 50kg bag at Rwf8000 ($11) wholesale price and Rwf10, 000 ($14) retail price.

Jerome Ntawiheba, a local cement dealer told KT Press that, "When you make a purchase order at Cimerwa, it takes more than two weeks to get the cement."

Eric Gisore, Cimerwa's Production Manager, said the factory is undergoing expansion works to cut production costs. "This will affect current prices as well," he said.

Meanwhile, Kilimanjaro cement, Tanzania's factory at the foot of Mountain Kilimanjaro, sells at Rwf 11,000 ($15), higher than the competitors. Ntawiheba says Kirimanjaro delivers orders faster and offers 50% discount on transport costs.

But even with the presence of regional suppliers, Rwanda's demand is unmet. The current supply is 400,000 metric tons every year. Cimerwa produces only 100,000 metric tons annually. The remaining 300,000 metric tons is imported, costing the country Rwf96 billion ($140 million) a year.

"We want to increase production to 600,000 metric tons annually," Cimerwa's Gisore said.

Trade Minister, Francois Kanimba, says Rwanda plans to increase production capacity of domestic industries by 20% in the next five years, up from the current 15%.

For Birimobiryezu, "Cimerwa will only capture our attention if it reduces prices below its competitors."

However, Birimobiryezu's wish might not be attained. Cimerwa's increased production is most likely to be overwhelmed by cement demand in the neighbouring DR Congo and Burundi, whose construction industry is also growing fast.