Holcim re-captures local cement market
By Desie Heita

An unprecedented growth in the demand for cement and the withdrawal of Cheetah Cement from the market has given Holcim an early Christmas present. It has now regained control of the market and is hiking its prices to the levels of last year. Demand for cement in Namibia is said to be as high as 18%. Cheetah Cement has not imported any cement shipment since the first quarter of the year. “We have responsibly and gradually increased the price of cement in recent months in line with prevailing cost and market conditions to ensure the sustainable supply of its products in Namibia over the long-term. The latest price increase will bring prices in line with the prevailing prices of a year ago,” says Wandile Zote, the spokesperson for Holcim. To satisfy the demand, Holcim is importing 3% of its annual production capacity. Last week Holcim shipped 24000 tons of cement into Namibia straight from Malaysia. “It is our intention to continue importing cement for as long as the demand outstrips the supply,” he says.
Namibia's cement monthly consumption is at 25000 tons and 270,000 per annum.

In the corresponding period last year Holcim had its hold to the cement industry broken by Cheetah Cement which imported cement from Brazil at a cheaper price selling a bag for N$35 way under the normal price of N$60. However, Cheetah Cement seems to have given up the fight and is no longer interested in the opportunity presented by the high demand for cement in the country. An official who could only identify himself as Setson said the company is now concentrating on establishing the cement manufacturing plant at Otjiwarongo. “That is our main aim. Right now we are behind with that project,” he said. Zedekia Gowaseb, who is the de facto CEO of Cheetah Cement, did not return calls. He was apparently in a meeting. Cheetah Cement says it is not expecting to import any cement until next year. “We want to concentrate on our ultimate goal,” said Setson.

The high demand of cement is not only being experienced by Holcim. “In fact, all four South African cement producers are currently importing cement,” says Zote. Zote says the demand is due to high seasonal demand which is typical at year-end and the fact that one of Holcim's kilns was shut down for four months during major refurbishments early this year. “This means that we currently have low stock levels.” Holcim says the unprecedented growth in cement demand is driven by the boom in the housing sector over the last few years. Reports from South Africa indicate that construction activities in preparation for World Cup 2010 have increased the demand for cement and steel.
Zote says the other four South African cement producers are also importing cement due to the high demand. However, the import of cement has a negative impacting on the profitability of local operations. “Because of the Rand’s depreciation against the US$, imports are being brought at a loss and are therefore affecting the profitability of local operations. The situation has been exacerbated by railway transport failures which have compelled us to resort to road transport that is more expensive,” says Zote.