Cement output cut by over 50%

A slow-down in economic activities has forced a reduction in cement production by close to 50 percent as players in the sector engage survival tactics in order to remain sustainable in the long-term.

A new entrant into the industry, Malawi Cement Products Limited (CPL), says high operating costs prevalent in the country are affecting the sector forcing most companies to scale down operations or shut down completely in an attempt to recoup operation costs.

CPL Chairman, Aslam Gaffar, said lax regulations governing the importation of cement into the country have worsened the situation as the high operating costs place local companies at a disadvantage when competing for market share with the cheap imported cement products.

Gaffar says his company has had to cut production time by half which has also necessitated reduction of production shifts to one-four-hour shift per day from initial three-eight-hour shifts when the environment was favourable.

“As low-down in construction activities on the Malawian market due to the prevailing economic challenges has effectively reduced the demand for local cement on the local market, forcing companies to operate at a breakeven or sometimes at a loss.

“As such, we have reduced our production time by over 50 percent in order to make sure that we are surviving on the market. As a local company, we manufacture our cement with materials imported from outside Malawi, a situation which is also eating into our resources a lot,” said Gaffar.

Gaffar further said Malawi’s current business profile is not attractive, such that it becomes difficult for local companies to get business financing from both local and international financiers.

“But we are striving to make sure that we complete the clinker factory to start mining activities so that we can help the country save foreign currency,” said Gaffar.

He, however, expressed optimism that the situation is likely to improve once the construction of its clinker factory is completed next year, which he said will help the company save a lot of money which is currently being spent on importing materials.