Budget disappoints cement manufacturers

By JACKSON OKOTH

Stakeholders in the regional cement industry are disappointed at the failure by authorities to protect them from cheap imports.

The East African Cement Producers Association (EACPA) says recent budgets of Kenya, Uganda and Tanzania, failed to create a level playing field for the industry.

Consequently, the association warns that the whole cement industry in East Africa faced closures and job losses. It attributes this to increased dumping of cheap and subsidized cement, especially from Asia.

Speaking during the annual meeting in Kampala, EACPA Tanzania Chapter Chairman Mbuvi Ngunze said the association had asked the East African governments to restore cement to the sensitive product status, pegging the Common External Tariff (CET) to 35 per cent or $50 per tonne. The Association had also sought for the governments to invoke additional anti-dumping and counterfeiting duties in consultation with the industry and institute correct valuation of imports for assessment of taxes and duties.

Domestic production

In 2007, East African governments encouraged cement makers to invest in new capacity to meet domestic shortfall.

Most manufacturers complied and invested at least $1 billion each, pushing up the region’s production from 6.4 tonnes to 10 million tonnes.

"We now have enough capacity to meet local demand and export to emerging markets in the region" Mbuvi said.

Although it was expected that CET be removed once manufacturers had new capacity, this has yet to happen as cheaper imports flood the market.

EAC member states removed the common external tariff in 2008 for a period of two years, which EACPA says opened doors for cheap imports to flood the market.