The cement Trade is arguably one of many largest contributors of the nation’s GDP as such it’s crucial for Authorities/stakeholders to assist the sector with insurance policies and stringent measures to safeguard it from collapse.
The trade nevertheless continues to grapple with excessive price of manufacturing, unfair commerce practices, low utilization price of the cement product and unfair competitors.
There’s a basic pattern of the imported items and all of the manufactured merchandise processed with imported uncooked supplies.
The freight charges have elevated rather a lot because the second half of 2020, sadly, the identical pattern was noticed to start with of the yr 2021.
Clinker is the principle part within the manufacturing strategy of cement, it represents about 80% of the composition, and all this materials is imported with a lot of the cement producers importing from faraway nations just like the Center East and Asia with extra price of transport.
Along with that, as a result of Oil value improve, clinker producers have reviewed their costs upwards to compensate the rise of their price of manufacturing.
The mix of those components led to a rise of the clinker (CFR, Ghana) price by nearly 16$US per ton through the first quarter of 2021.
Consequently, the cement price elevated by nearly 14% which has not been completely affected to the cement value.
Throughout this primary yr of Covid-19 disaster, because of the slowdown within the native economies worldwide, the monetary sources reached the underside, the circulation of cash and cashflow went to their minimal ranges because of the interruption of many companies and the closure of factories.
As a consequence of this case the nations all world wide used their very own shares of grain, meals, coal, cement, clinker, iron, metal, iron ore as a result of they might not have the money to run their companies.
Now, the softening on the Covid-19 restrictions and with the consolation of getting vaccines, a lot of the factories resumed operations, folks began going out, purchasing, travelling… Thus, the economies began recovering and producing funds.
All of the nations which have used nearly all their shares now reconstituting their reserves of grain, coal, Iron-ore, cement, clinker and meals.
China who nearly consumed ‘’their battle interval shares’’ is now restocking nearly 200% greater than their traditional stage.
This example led to a rise of about 150% within the cargoes transported by sea.
Between 2012 and 2018, part of the delivery fleet went to scraps as a result of a really unhealthy freight market and, since 2018, few new constructed vessels entered the market.
This example disbalanced the freight market and led to lacks in satisfying the cargo improve and demand for ships.
Nations began making huge investments in various power sources, which suggests extra metal, cement, clinker, coal, iron, timber-logs, iron ore are wanted for the initiatives.
As a consequence, the demand of freight will improve.
Lastly, Oil value improve additionally had a damaging influence on the freight.
Although limestone reserves exist in Ghana, volumes are restricted; therefore the cement trade continues to rely largely on clinker imports.
Moreover, there may be investments in capability capped now in comparison with some years again, with new cement gamers constantly coming into the market.
Native producers maintain arguing that the viability of opening up extra new cement factories will not be economically sustainable for competitors however fairly has the impetus to encourage sure producers from compromising with high quality.
Native producers have due to this fact agitated for a ban on the issuance of permits to corporations that need to arrange new cement processing crops within the nation.
Statistics have it that, the present cement producers in Ghana have a mixed utilization price of about 44%, a sign that, there’s a complete enough cement capability in Ghana.
To this point, there are eight cement manufacturing corporations positioned at 10different places all through the nation with a complete put in manufacturing capability of 11 million tons/every year.
There’s one cement bagging plant that additionally has an put in capability of about 1.0 million tons/every year.
That provides, a mixed put in capability (manufacturing and bagging) of about 12.1million tons/every year.
The typical consumption of cement within the nation can be about seven million tons/every year which demonstrates an enormous extra capability of about 5 million tons/every year.
Some growth initiatives together with: a Bagging plant in Tema by Dzata cement Ghana restricted and a Manufacturing plant in Takoradi by Dangote Cement Ghana are additionally underway so as to add as much as the present capability.
The ECOWAS Commerce Liberalization which permits free motion of products and other people throughout the Area has compounded the unfair commerce practices by some gamers who import cement from neighboring nations having fun with ‘Export grant growth scheme’ that gives subsidies to those importers giving them benefit.
It’s crucial that the Ghana Worldwide Commerce Fee Act 926 is allowed to work to guard native industries together with cement trade are shielded from unfair commerce practices.
It’s worthy to say that, the African Continental Free Commerce Space (AFCTA) has come to remain and though it gives advantages for the native market the aforementioned challenges of unfair commerce practices and anti-damping ought to be checked with an eagle eye.
Authorities’s effort is a key consider sustaining the cement trade and sustaining acceptable ranges of costs regardless of the inflation and the depreciation which is a attribute of the market.
As instance: the stevedoring licenses granted to the industrials are contributing to cut back the price of imported uncooked supplies.
Sadly, the jetty challenge introduced by GPHA just lately might be disastrous for the cement trade by way of prices and logistics administration.
Not lower than 10$US per ton might be added to the price of clinker (7-8$US per ton of cement or 2,3GHC/bag).
With the newest growth in tackling the Covid-19 pandemic which has seen the softening of the Covid-19 restrictions, availability of vaccines and a lot of the factories resumed operations and the financial system haven began recovering and producing funds, it’s the hope that Authorities revisit the cement trade by placing up stringent measures to safeguard the already current ones from collapse.
Chamber of Cement producers, Ghana
The Chamber of Cement Producers, Ghana was formally inaugurated on Monday 2nd July, 2018 in Accra to guard the curiosity of its members via collaboration backed by a structure.
Present membership/founding corporations are: GHACEM Restricted (Tema, Takoradi) Diamond Cement Group (Aflao, Buipe within the Northern Area and Takoradi) and CIMAF Ghana Restricted (Tema).
The Chamber is at present below the chairmanship of Mr. Frederic Albrecht-Scott, the Managing Director, of CBI Ghana Restricted, producers of SUPACEM cement.
Media males caught up with Rev. Dr. George Dawson-Ahmoah, he’s the present Govt Secretary who performed an instrumental function for the cement trade to get a Legislative Instrument (LI 2240), enacted in Parliament in 2016 to control the importation of bagged cement from China and elsewhere to keep away from incurring additional damage to the native cement Trade.
Rev. Dr. Dawson-Ahmoah seized the chance to attraction to Authorities to as a matter of urgency implement all insurance policies earmarked to guard the cement trade from collapse.
“Authorities should work assiduously for the LI to be revered and carried out pretty and never politicized by revoking and banning licenses for importation of bagged cement by considered the massive surplus put in capability because it’s being completed in neighboring nations like Togo, Benin, Burkina Faso and Nigeria. Additionally it is essential to take care of and shield the already current corporations who’ve the enough put in capability. The truth is, to get up and see new cement gamers nonetheless surfacing within the trade on a regular basis is disheartening and we see it as Anti Ghanaian and has the apparent penalties of affecting employment, monetary contributions to the financial system, erosion of revenue margins and really lengthy return on funding”.
“We’re optimistic that the native cement trade has enough capability to satisfy the demand with the varied expansions initiatives by producers which have been accomplished to ensure the wanted capability within the nation”.
He cited GHACEM’s funding of about $52million for growth work at its Tema and Takoradi factories, Diamond Cement Group’s development of 60 million Euro new cement manufacturing unit in Takoradi and the funding of 60 million Euro into the development of a brand new cement manufacturing unit, CIMAF by Morocco.
We all know the Covid-19 pandemic affected economies worldwide, monetary sources reached the underside however Ghana, we’re optimistic can decrease the damaging influence of this pandemic by revisiting the port dues, stevedoring, customs duties, electrical energy and the taxes (NHIL, GETFUND) which represent greater than 30% of the clinker price.
The Authorities is already supporting us via the benchmark worth on the clinker; nevertheless, if we may have extra assist on the above components throughout this era of instability, the influence on cement value amongst different uncooked supplies might be clearly optimistic.
The market is displaying throughout this primary quarter pattern.
The market was estimated in 2020 at 6.8 to 7 million tons, the perfect efficiency ever achieved, recording a development of about 7% comparatively to 2019 which was a foul yr for our trade (-2%).
Nevertheless, because of the uncertainty across the Covid-19 ending, our expectation for 2021 is mitigated, however it’s seemingly that the identical pattern will proceed a minimum of for the primary semester because of the ongoing initiatives initiated by the Authorities and to shut the yr with about 3-4% development. No scarcity has been recorded.
Some clinker vessels delayed coming into TEMA port as a consequence of the faraway origin (Center east, Asia) and because of the lack of vessels available in the market, however with out impact on the cement manufacturing.