BENEDICT TEMBO, Lusaka
ZAMBIA’S property market is one of the fastest growing on the continent, and at the heart of this phenomenal growth is
the now readily available low priced cement.
The massive cement consumption by property developers is an indicator of positive economic growth the country is undergoing.
Zambia has 14 cement manufacturing companies which have contributed immensely to economic expansion by making cement readily available for property developers.
Of the 14, only three, Dangote Quarries Zambia Limited, Lafarge Cement and Zambezi Portland Cement, are the major contributors to the construction sector.
Between them, they produced 1,956,519 metric tonnes of cement in 2016 and collectively paid domestic taxes amounting to K243,083, hg625.06 to the treasury.
Lafarge, the country’s pioneer cement firm which has a production capacity of 1.5 million tonnes per annum, accounted for 824,204 metric tonnes, with the Chilanga plant churning out 551,265mt and the Ndola factory producing 272,939mt.
Lafarge (previously called Chilanga cement) was commissioned in 1949 and cement production began in 1951 at Chilanga plant with the sole purpose of supplying cement to the Kariba Dam wall construction project.
“Lafarge is the market leader in both Zambian domestic market and the regional market including the Democratic Republic of Congo (DRC), Burundi, Malawi, Zimbabwe and Tanzania,” says Lafarge Zambia corporate affairs and sustainable development director Eugene Chungu.
Mr Chungu says the company continues to review plans to increase capacity in order to respond to the needs of the market.
The technology that Lafarge, which is categorised as a bulk purchase customer or user of electricity demanding close to 20MW, uses is a rotary kiln technology and is a state-of-the-art one which is environmentally friendly and is accepted worldwide.
“This is far more advanced compared to the inferior vertical kiln shaft technology that other cement companies use,” Mr Chungu says.
In 2001 Lafarge acquired the assets of Commonwealth Development Corporation (CDC). In 2015, the parent company Lafarge, the French giant, merged with Holcim, a Swiss company, to become the most advanced building materials supplier and construction solutions provider in the world.
New kid on the block Dangote Quarries is the second largest producer with 770,620mt while the output for Zambezi Portland in Ndola is 361,695mt.
Dangote is credited for changing the cement industry landscape in Zambia since its entry in 2015. It has become the fastest-growing and leading cement producer in Zambia, with an installed production capacity of 1.5 million tonnes per annum.
The arrival of the company owned by Nigerian billionaire Aliko Dangote ended the long wait experienced by customers who want to buy cement and near monopoly of Lafarge.
Dangote started selling its cement on the Zambian market in July 2015 with sales increasing exponentially in the first full calendar year of operations in 2016.
“This growth can be attributed to the high quality cement produced and sold by Dangote,” says public and media relations manager Katongo Chilufya.
Ms Chilufya says every bag of Dangote cement represents a rigorous process of quality analysis and fine-tuning to ensure that customers have an experience with cement like never seen before in the country.
She says Dangote became the first plant in Zambia to install vertical roller mills (VRM) which are a modern-day replacement for ball mills. VRMs provide higher output, better quality consistency and lower specific power consumption.
“At the helm of quality control process is the highly automated robo-lab, an unmanned quality assurance process that samples, analyses and produces high precision results of all raw materials, intermediary products and cement. The cement plant has its own power plant, which produces 30MW of power,” Ms Chilufya says.
She adds that Dangote remains committed to producing the highest quality cement at the lowest workable cost. This is to ensure that all customers get the same magical experience on the first bag to the last bag they purchase.
“Hence, we are a proud partner of the Zambian people and are here to stay as we build Zambia together,” she assures.
Scirocco Enterprises Limited in Lusaka, which trades as Oriental Quarries, produces between 50,000 and 100,000 tonnes per year.
Scirocco, which started manufacturing cement in December 2005, produces mostly for its own use and sells some in Lusaka to construction companies.
Scirocco Enterprises managing director Moustafa Saadi says his company sells less than 20 percent of its cement on the local market.
Mr Saadi says plans by Scirocco Enterprises to increase production were disrupted when Lafarge took legal action to have its mining licence revoked.
The company, based in Chilanga and has a 3.2MW substation, says increased competition has lowered prices as the coal has to be imported from Zimbabwe for its processing.
“The devaluation of the Kwacha has hit our costs due to the required importation of spares and consumables,” Mr Saadi says.
Zambia Revenue Authority (ZRA) senior economist – statistics and data management in the research and policy department, Mukuka Mulenga, says the compliance among cement companies has been largely good as is the case with most large taxpayers.
“Their compliance rates are well above 75 percent across all the tax types that they are registered for,” Mr Mulenga says.
He says ZRA does not charge a carbon tax to cement producers in the context of the environmental impact.
He, however, says the only carbon-related taxes paid by the companies relate to the use of motor vehicles within the existing legal framework.
“The Local Authorities are responsible for such environmental levies outside the carbon surtax on motor vehicles,” he says.
Indeed with Zambia aspiring to become a prosperous middle- income country by 2030, the availability of fairly priced cement will be cardinal for citizens’ access to decent accommodation.