Growing demand for cement in Rwanda allows opportunities

04 May 2015

Rwanda has become a regional hotspot for cement producers. Cimerwa, a local cement producer has failed to meet the demand, thus allowing neighbouring cement manufacturers to enter the growing Rwandan market.

According to the 2012 Population and Housing Census, 91% of Rwandan homes are built of either sun-dried bricks or mud.

Durable building materials made from cement are expensive and thus less affordable to the majority of the Rwandan population.
The wholesale price for a 50-kg bag of Uganda‘s Hima cement, costs Rwf6000 ($8.5) and Rwf9100 ($12) retail price.

But Cimerwa, 51% owned by South Africa‘s PPC, sells the 50-kg bag at Rwf8000 ($11) wholesale price and Rwf10, 000 ($14) retail price.

Jerome Ntawiheba, a local cement dealer said: “When you make a purchase order at Cimerwa, it takes over two weeks to get the cement.”
Eric Gisore, Cimerwa’s production manager, said the factory is undergoing expansion to cut production costs. “This will affect current prices,” he said.

Meanwhile, Kilimanjaro Cement, Tanzania‘s factory at the foot of Mountain Kilimanjaro, sells at Rwf 11,000 ($15), higher than the competitors. Ntawiheba says Kirimanjaro delivers orders faster and offers 50% discount on transport costs.

But even with the presence of regional suppliers, Rwanda‘s demand is unmet. The current supply is 400,000 metric tons every year.

Cimerwa produces only 100,000 metric tons annually. The remaining 300,000 metric tons is imported, costing the country Rwf96 billion ($140 million) a year.

“We want to increase production to 600,000 metric tons annually,” Cimerwa’s Gisore said.
However, Cimerwa’s increased production is likely to be overwhelmed by cement demand in DRC and Burundi, whose construction industry is also growing fast.


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