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Power hurdle keeps cement prices up

Construction sector growth projections have been lowered in recent years mainly because of unreliable power supply, jeopardizing dreams of low and middle income segments of society to own homes.

Juerg Fluehman, Managing Director of  Tanga Cement told a shareholders meeting in Dar es Salaam over the weekend that unreliable electricity supply continues to be the biggest challenge not just in production but also threatens industrial development of the country.


“Unfortunately the problem is worsening, making local production increasingly uncompetitive against imports from industrialized countries in the Middle East and Asia” said Fluehmann. He also cited the global crisis as having its impact on the Tanzanian economy and the construction sector.

He said Gross Domestic Product (GDP) growth projections have been revised down and a lot will depend on how effective the monetary policy of the Bank of Tanzania (BoT) is in managing inflation, exchange rates and interest rates. “All these factors are directly affecting growth of the construction sector”, he said.  Other factors were delays at the ports in receiving of spare parts and the almost non-operational railway infrastructure adding immense cost to production and distribution of cement to the rural areas.

Cement demand in the country is projected to grow to 1.9 million tonnes this year, an increase of 6.7% on 2008. However, increasing imports of cements will pose a threat to the local cement industry.  He said as part of creating awareness on environmental issues they have embarked on quarry rehabilitation whereby sisal ant trees have been planted at Holili quarry in Tanga region and handed over to the village.

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