With five production units, a supply exceeding demand, the price of a bag of cement continues to rise on the market. Importation of equipment, raw materials and recruitment of foreign human capital, all using foreign exchange, may be the basis for rising prices. Clinker is not lacking on the market
Building or buying a house has become even more expensive in recent days. The price of construction materials, with a focus on cement, is increasing monthly. If in the last two months a 50-kilo bag could be purchased for 3,800 kwanzas, now it costs 4,800 in Cacuaco, which may vary from place to place. The transportation cost plays a major role in determining the price when the product reaches the final consumer.
At the Kifica market, for example, a bag of cement can be purchased for 5,000 kwanzas. In the last six years, a 50-kilo bag of cement cost no more than 1,800 kwanzas. What most sellers say is that the cost of living, especially the rise in prices of other goods, also had an impact on cement, a product for which Angola achieved self-sufficiency a few years ago. For now, experts in the cement market argue that there are no reasons for the exponential rise in prices, as the conditions have been created for this industry to work without problems. “We have enough clinker to supply the market.
And it is not an imported raw material. It can be found internally, so there is no justification for the constant rise in the price of cement”, considered António Albino “Carnaval”, who was administrator of Nova Cimangola. The former manager of one of the largest cement companies in the country also mentioned that, in the production and value chain, cement does not have elements that can greatly impact the price, since even the bags are made nationally. “All I know is that Nova Cimangola does not produce bags, but buys them on the national market. Therefore, we have sufficient conditions here to have a product with a stable price and capable of being supplied to the market without problems,” he said.
To support his position, Albino António states that “if we had a lack of cement or raw materials, we would not be exporting to neighboring countries today, mainly to the Democratic Congo”, he argued. The Nova Cimangola factories, in Cacuaco and Sequele, respectively, have a current installed capacity that allows annual production of more than one million tons of clinker. Cimangola itself is dedicated to selling clinker, cement and other aggregates on the domestic market and also for export, as can be read on the company’s website. The company has two horizontal ball mills with a total installed capacity of 6,000 tons per day (six thousand tons). In turn, CIF-Luanda has an installed capacity of more than 1000 tons per day, but is unable to reach these levels for various reasons, mainly energy, however, without prejudice to the market which has other options.
“Other factors interfere in the production chain”
Despite stability in terms of production, the rise in cement prices is a reality. On the subject, the Commercial administrator of the Fábrica de Cimento do Kwanza Sul (FCKS), owner of the Yetu brand, Panzo Nteka, states that prices are not related to self-sufficiency or not, but to other factors that interfere in the production chain. . “We do not see a direct relationship between the price of a good and the fact that the country becomes self-sufficient in the production of that same good. There are factors that determine the cost of producing the good and then its selling price.
Many of the inputs used in the cement production process are purchased on the foreign market using foreign exchange, and everyone knows what has been happening with the exchange rate. This industry also imports specialized technical services that are paid in foreign currency”, he explained. As for ways to mitigate this and other problems, Panzo Nteka says that FCKS has already been mitigating because it has never raised cement sales prices in proportion to the rise in input prices, and this is because it has made a commitment to work towards side of the Executive to help society have access to this asset that is useful for the country’s reconstruction process.
He explains that FCKS has been working on financial reengineering to seek to control, as far as possible, production costs to maintain prices at acceptable levels. He emphasizes that the prices charged in our country are the lowest in the region and this is the result of a sacrifice. With an annual production of 47,000 tons and a market share of 23%, FCKS does not intend to increase its production capacity. And its administrator explains the reasons: “Given the trend in demand, we do not intend to increase production. Unless there are clear signs of improvement in demand for our products”, he cautioned.
For him, the biggest constraint is the lack of demand. He emphasizes that cement is not produced to make stock, it is produced for sales. “The other constraint has to do with the rise in prices of inputs consumed in production”, he indicated. However, there is no shortage of the main raw material, clinker. “We do have clinker. There is enough clinker production to supply local cement companies and even to export,” he said. Given the scenario he presented, marked by a lack of demand, Panzo Nteka says that additional investments in mills are not justified given the market’s inability to consume current production, in a competitive market, in FCKS’ view, where the best “survive”.
With a workforce of 1,000 jobs (direct and indirect), FCKS has a significant presence of Yetu cement in Luanda and Huambo. “We also have an acceptable presence in the provinces of Bié, Cuando Cubango, Kwanza Sul, Kwanza Norte, Benguela, Huila, Namibe, Malange, Moxico and the Lundas. There are distributors who take Yetu cement across the border (São Tomé and DRC), and the company’s management is working to enter other markets in the SADC region and beyond”, he announced.
Five factories, more than 8 thousand tons per day
Five cement companies compete for the national market, two in Luanda, specifically Nova Cimangola and CIF-Luanda, Secil Lobito and Cimentfort, in the province of Benguela, and FCKS, in the municipality of Sumbe, in the province of Cuanza Sul. With the five cement companies, the country It can produce up to 8 million tons of cement per year, meeting the needs of the national market, with a surplus that is exported, especially to the Democratic Republic of Congo. Clinker can be defined as cement in a basic manufacturing phase, from which Portland cement is manufactured, usually with the addition of calcium sulfate, limestone and/or steel slag.
Cement is mainly composed of clinker and additions, with clinker being the main component present in all types of cement. It exists as an independent commodity, traded worldwide, because it is not as sensitive to humidity as Portland cement and, as such, makes it easier to store, handle and transport. In the Portland cement manufacturing process, the Portland cement clinker leaves the kiln at around 80°C, going directly to the grinding mill, where it is added to the gypsum and immediately bagged in paper bags, and can reach the distribution warehouses even warm.
