The Minister of Trade and Industry; Vincent Munyeshyaka has warned that heavy fines await those who are taking advantage of the current hitch in cement production to hike prices.
Addressing a press conference at his office on Thursday, Munyeshyaka said that though there has been a shortage of cement on the market; the hiking of prices is illegal, adding that about thirty traders have already been fined as a result.
"We have so far fined about 30 of them. It is our responsibility to protect consumers. When we find any speculation, the Ministry is legally obliged to intervene. We will continue checking the prices because we know in some areas, they are still selling cement at Rfw12, 000 in some areas its Rfw15, 000,” he said.
He said that the fines range between Rwf100,000 and 300,000.
Munyeshyaka blamed scarcity of cement, which started in February this year, on the cleaning process that local cement producer CIMERWA was undergoing.
"CIMERWA decided to take on a cleaning process of their machines and replacing old machines with new ones. They were also trying to improve on the technology they use as part of their plan to raise their production from 1,300 tonnnes a day translating into 380,000 tonnes a year to at least 1,500 tonnes a day and 500,000 tonnes a year,” he said.
The Chief Finance Officer of CIMERWA John Bugunya told journalists that the margin between the cost of production and the price of the final product stands at about 3 percent.
"We are trying to see how we can further reduce the prices and cleaning the machines, installing new ones is part of the process. When you look at the price of cement and factor in the cost of production, the margin is minimal,” he said.
Private Sector Federation Chief Operations Officer Yvette Mukarwema assured their members that the issue had been fixed and blamed speculation of prices on lack of enough information.
"When such issues arise, they obviously affect our members. Our duty is to find ways how such changes do not leave a significant dent in our members’ daily activities. We have had discussions and there is an issue of lack of proper information. Let it be known that cement is now available and that the price has not changed,” she said.
Blocking imports
Journalists asked about the rumors that even with the scarcity of cement on the market, importers of the product were being blocked from bring into the country, a move that many say is aimed at giving CIMERWA products priority on the market.
However, Munyeshyaka dismissed the allegation and instead pointed out that cement imports stand at 45 percent, saying that the imported cement is even cheaper on the market.
Much of the cement imports come from Tanzania and Uganda.
"We are trying to see how we can phase out coal which mostly comes from Tanzania and is costly and replacing it with peat and replacing electricity with methane gas and if we achieve that, then the price will go down significantly,” he explained.
The representative of CIMERWA cement traders Vincent Sibomana told the reporters that the rumour was baseless, pointing out that during this period of CIMERWA cement shortage, around five different regional companies selling in the country.
CIMERWA is expected to produce 600,000 tonnes of cement annually by 2020.