Minister of Trade Sosten Gwengwe says the construction industry should not panic with reports of a shortage of cement in the country, as government has put in place necessary measures to stabilise supply.
The assurance follows concerns raised by lawmakers in Parliament on Tuesday that cement supply is low in the country, a development which has pushed the price of 50 kilogramme (kg) bag of cement from an average of K6 800 to K7 300.
Former minister of Transport and Public Works Francis Kasaila raised the issue of cement when he asked Gwengwe to explain why he has cancelled cement import licenses—a likely cause for cement scarcity in the country.
He warned government that the cancellation of the licences would cost Malawi over K2 billion in public project overruns.
But Gwengwe assured Kasaila that no import license has been cancelled.
“The cement price increase is on account of the increase in prices of cement from Zambia, where 80 percent of our cement imports come from. The Zambia kwacha keeps devaluing and we are importing inflation.
“The solution is to encourage local production of cement. We have three cement companies and, through Export Development Fund [EDF], we are trying to fast-track a fourth producer, Bwanje Cement,” he explained.
The minister also said cement supplies will stabilise and the ministry is looking for a solution on how best to lower cement prices through normal market forces of demand and supply.
Currently, Shayona Cement Corporation produces 900 tonnes per day but the company’s production capacity is currently being expanded to reach 1 800 tonnes per day by mid next year, Gwengwe said.
Cement Products Limited is currently producing about 700 tonnes of cement per day but it is expanding to produce 1 000 tonnes in the next three to four weeks.
Lafarge Holcim has capacity of 650 tonnes per day.
The country imports an average about 750 tonnes of cement per day, translating to 15 000 bags of cement per day.
According to the 2020 Malawi Annual Economic Report, Malawian companies have invested a lot in the manufacturing of cement and increased production capacity of cement from 210 500 metric tonnes in 2019 to 243 075 metric tonnes.