Moçambique Dugongo Cimentos considers that an arbitrary reduction in the price of cement could affect normal production and supply in the market, stressing that the establishment of the cost is influenced by multiple factors, which cannot be explained and decided by a single piece of information or number.

Located in Matutuine, Maputo province, the company made this clarification in a note, in reaction to the protests taking place in various parts of the country, demanding that the bag of cement be sold below 300 meticais, since the price of the same product in South Africa is lower than that practiced on the national market.

In a note quoted by Letter from MozambiqueThe managers of Dugongo Cimentos begin by explaining that "cement production is a complex industrial process with costly components such as limestone, diesel, coal, equipment and imported raw materials".

"To illustrate, the cost of coal increased from 3840 meticais/tonne in 2021 to 6450 meticais/tonne, and the price of diesel increased from 47 meticais/liter in 2021 to 91 meticais/liter," the organization described.

The company went on to explain that the export price to South Africa is below the cost of production, not in order to make a profit, "but to obtain the foreign currency needed to pay for 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 transportation to Maputo is higher than importing from South Africa. We therefore need to resort to limited exports in order 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 the market laws of that country so as not to disturb competition".

"In the southern region of Mozambique, the price is usually around 420 meticais, while in some northern regions it can be as high as 620 meticais. This difference has to do with the cost of transportation. The price is not always determined unilaterally by the companies, but by market conditions and logistics," added the company owned by the SPI (Mozambican) and West China Cement Limited (Chinese) business groups.

(Photo DR)