Cement prices will decline gradually - Cimerwa chief

Juvenal Rutaganda is the operations manager and acting chief executive officer of Cimerwa cement factory. The firm unveiled a new hi-tech plant last week, which is expected to produce 600,000 tonnes of cement annually. Business Times’ Peterson Tumwebaze caught up with him after the launch of the new factory to explain why Cimerwa cement is expensive compared to imported cement, among other issues that affect local manufacturers. Customers have for long complained about high prices of Cimerwa cement. Why is Cimerwa cement more expensive compared to imported cement? It is true Cimerwa cement is expensive…This is mainly because of two or three reasons; we have using old and inefficient technology for quite some time… We relied on wet technology, which is expensive compared to dry technology that is more efficient. Our counterparts in the region use this technology, giving them an advantage over us. Secondly, for locally-manufactured products like cement to be expensive, it is usually caused by high cost of production, including the high logistics costs and insufficient power supply. This does not only affect cement industry, but almost all sectors as well. For example, unreliable power supply means using other alternative sources of energy like imported heavy fuel oil, which is expensive. Unreliable power supply is one of the major challenges that hurt production of any industry, cement makers inclusive. The supply is also still low, which makes it tricky now that we are using automation at the new plant. You can’t afford frequent power cuts with such technology. However, we are hopeful that with the commissioning of the 15MW peat power plant, the problem should be history. Of the 15MW, we will use 13MW and connect the rest onto the national grid. Lastly, apart from these problems, we have also been relying on middlemen to distribute the cement on to the market. This is partly to be blamed for the disparity in prices of locally-made and imported cement. Currently, a 50-kg bag of cement goes for Rwf11,000 at Cimerwa compared to imported cement that costs between Rwf8,500 and Rwf9,000. What should be done to address this problem so that Rwanda producers remain competitive and consumers get affordable products? Since we will be using new technology that does not require as much power or manpower to run at the new plant, we are certain that prices will gradually come down. We also want to remove the middlemen from business and start handling the logistics part ourselves. This means that customers will be able to get cement from our warehouses across the country. However, to bring down prices, government will have to keep investing more money in infrastructure and technology as a long-term solution. This will support use of locally-made raw materials and reduce the cost of final products. Otherwise, we will not achieve much since Rwanda is a land locked country, which heavily relies on importation. Cimerwa is going to increase production by 150 per cent, are you not concerned about the impact this will have on the environment? Any big investment is cleared by the Rwanda Development Board and investors are given a certificate to confirm it has conducted an environment impact assessment (EIA). We conducted an EIA, which was approved by the Rwanda Environment Management Authority. Besides, we are employing new technology that we are certain will not affect the environment. What is your take on the ongoing debate about Rwandas future come 2017? We are not prepared to sacrifice the peace and stability President Paul Kagame has brought to this country for anything. Change the article (101 of Constitution) and allow the President to continue governing.

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Cement prices will decline gradually - Cimerwa chief