Mozambique’s Dugongo Cimentos, located in Matutuine, Maputo province, has made it known that an arbitrary reduction in the price of cement could affect normal production and supply in the market, emphasising that the establishment of the cost is influenced by multiple factors, which cannot be explained and decided by a single piece of information or figure.
In a statement released by Carta de Moçambique, the company’s managers explained that cement production is a complex industrial process with cost components such as limestone, diesel, coal, equipment and imported raw materials.
‘To illustrate, the cost of coal has increased from 3840 meticais/tonne in 2021 to 6450 meticais/tonne, and the price of diesel has increased from 47 meticais/litre in 2021 to 91 meticais/litre,’ the entity described.
The protesters, in various parts of the country, under the leadership of former presidential candidate Venâncio Mondlane, are demanding that the bag of cement be sold below 300 meticals, a stance that has been disrupting the commercialisation of the product. According to them, the price of the product in South Africa is lower than on the national market.
In this sense, the company explained that ‘the export price to South Africa is below the cost of production, not with the aim of making a profit, but to obtain the foreign currency needed to pay for the fuel and imported raw materials’.
‘Resources such as coal in Mozambique are mainly concentrated in Tete province and, due to insufficient infrastructure and the long distance, the cost of transport to Maputo is higher than importing from South Africa. We therefore need to resort to limited exports to obtain foreign currency and maintain production,’ he argued.
Dugongo Cimentos clarified that ‘in the South African market, the price of cement is not lower than that of local manufacturers, strictly following that country’s market laws so as not to disturb competition’.
‘In the southern region of Mozambique, the price is generally around 420 meticals, while in some northern regions it can be as high as 620 meticals. This difference has to do with the cost of transport. The price is not always determined unilaterally by the companies, but by market conditions and logistics,’ he explained.
Moçambique Dungongo Cimentos is owned by the business groups SPI (Mozambican) and West China Cement Limited (Chinese). SPI has a vast business portfolio and has been associated with the Mozambique Liberation Front (Frelimo) by research institutions.
