Online Reporter
Martin Kadzere
ZIMBABWE is poised to achieve self-sufficiency in cement production by mid-next year, a development expected to reshape the country’s construction sector and transform it into a regional exporter.
The operationalisation of major new cement plants, primarily driven by significant foreign capital, would drastically increase domestic output, eliminating the historical reliance on imports.
Despite the imposition of a 30 percent tariff on imported cement, local manufacturers have consistently struggled to meet domestic demand due to a combination of operational challenges and persistent power shortages.
To bridge the perennial gap and ensure price stability, the Government has been compelled to issue import licences with prescribed quotas.
This has proven insufficient, as the prescribed quotas are quickly exhausted, and the ever-rising national demand for cement — driven by major infrastructure and housing projects — continues to outstrip local capacity.
A gradual increase in cement prices has been observed over the past two months, following the exhaustion of prescribed import quotas by most traders.
However, the current wave of investment, notably from Chinese investors, is rapidly expanding Zimbabwe’s cement manufacturing capacity.
Projects like the US$120 million Chegutu cement plant by Shuntai Investment, scheduled to commence production early next year with an anticipated output of 800 000 tonnes per annum — about 80 percent of the current capacity — are key contributors.
Africa’s wealthiest man, Aliko Dangote, is making his second visit to Zimbabwe with plans for a US$1 billion investment that includes the establishment of a cement manufacturing plant. His existing cement products from a Zambian operation are already in the local market.
Two cement plants recently commissioned in Hwange are already having a noticeable impact on the market, with their product — a blend of coal ash and clinker — flowing into the market.
Industry and Commerce Minister Mangaliso Ndlovu affirmed in an interview that increased domestic competition will lead to the cessation of cement imports, stabilising and potentially lowering prices to make construction projects more affordable.
He further noted that the country is strategically positioned to become a net cement exporter by the middle of next year.
“I told those we are giving import licences that this year is your last chance because, by mid next year, the country will have achieved self-sufficiency and also be in a position to export surplus,” said Minister Ndlovu, emphasising the Government’s timeline for ending cement imports.
With national demand continuing to surge and installed production capacity set to increase significantly, the resulting cement surplus will be channelled into the lucrative regional export market.
Industry analysts, however, noted that, to ensure local products are successfully absorbed by regional markets, manufacturers must focus on achieving a cost structure that allows them to produce competitively.
“The challenge with Zimbabwe is the cost of manufacturing — it is on the higher side, it is the highest in the region, which makes the country uncompetitive. It’s difficult to penetrate regional markets because of the high costs of production. We are looking at the benefits that will come from increased capacity, but addressing those costs is paramount,” economist Carlos Tadya said.
Zimbabwe’s cement prices, at US$10 to US$12,50 per 50kg bag, are significantly higher than those in regional markets like Eswatini, Namibia and Zambia, where prices generally range from US$5,50 to US$6,45.
The substantial difference makes locally manufactured Zimbabwean cement uncompetitive in the regional market, with prices up to 47 percent lower elsewhere.
However, new efficient cement facilities, such as those in Hwange, are emerging. The ex-factory price of cement from these operations is now competitively at par with regional products. However, these gains have not yet translated to lower prices for the final consumer due to high road transport costs.
Minister Ndlovu said the final consumer price could be significantly lowered — even becoming competitive with current regional market rates— by using rail.
With Zimbabwe experiencing high levels of construction activity, driven by both public and private sector players, the increased availability of cement and the potential for lower prices are expected to drive the sector even further.
Analysts note that construction activity has been robust even at current elevated prices, suggesting the pace could accelerate significantly.
To further boost this momentum, the construction sector is seeing a decrease in the cost of other inputs in its value chain, notably bricks, where new efficient producers are offering lower prices.
The Manhize steel plant is also expected to lower the prices of steel, a major component in the construction value chain, thereby providing a further boost to the entire industry.
