By Waswa Tenywa
Government has given a green light to cement wholesalers to start their own factory to supplement production, amidst the high cement prices that are said to be caused by the scarcity of cement in the country.
Speaking to the cement wholesalers in Kampala, the Minister of Trade, industry and Cooperatives Amelia Kyambadde said this is the time for cement wholesalers to put their resources together and start their own factory.
Kyambadde met the wholesalers on Thursday 12th April 2018 at the Ministry headquarters, in a bid to address the problem of the rising cement prices, amidst counter accusations from manufacturers and distributors each accusing the other of causing the problem.
The wholesalers under their umbrella association Construction Hardware Dealers Association (CHADA) told the Minister that the scarcity of cement on the market is caused by the manufacturers who have failed to supply them with enough quantities. They also accused the manufacturers of discriminatory distribution saying that there is no proper distribution channel of cement.
The spokesperson of the wholesalers association and the Managing Director of Hardware World Simon Ssekankya says Indians have the monopoly in the cement industry and they use that advantage to discriminate in the distribution of cement.
“During this period of scarcity, I receive only one truck of cement yet some Indian wholesalers receive more than 10 trucks in a day”, exclaimed Ssekankya.
The wholesalers asked the minister to expedite the decision to limit the amount of cement exported outside Uganda and to open up Uganda’s borders and allow in imported cement so as to solve the scarcity problem.
Maria Namusoke of Markh Investments said if imported cement is allowed in, it will bring down the cement prices in Uganda which she says are higher compared to the neighboring countries even in times of surplus production.
While meeting the cement manufacturers earlier this week, Kyambadde gave them an ultimatum of 3 weeks to increase supply or else face competition from imported cement.
However, Kyambadde said that she will wait until the 3 weeks elapse before taking the decision to allow in imported cement. She said government has given the manufacturers an opportunity to address the challenges they were facing that are affecting production capacity mainly the power shortages and delays in clearance of clinker.
Kyambadde advised the wholesalers to put their resources together because they have the capacity and start a cement factory to supplement the existing 3 factories and solve the scarcity problem, the monopoly problem and discriminative distribution.
“Government will support you to start up a cement factory. Government will avail you with the land in addition to importation of machinery duty free and exemption of corporate tax for 10 years”, explained Kyambadde.
She advised them to undergo training and attain skills in cement production in preparation for starting their own factory.
The Minister also urged the wholesalers to fight for their rights through their association. She urged them to study and understand the Sale of Goods and Supply of Services Act 2017 that spells out the rights of the buyer in conducting transactions so that they can fight for their rights. This was after the wholesalers informed the minister that cement manufacturers have not registered them as their distributors and therefore do not give them any written contracts.
Kyambadde urged them to strengthen their association and have a stronger voice in fighting for their rights.
Cement prices have increased in the last three weeks from an average of Shs28,000 to more than Shs40,000 for a 50 kilogramme bag.