The Ministry of Economy will remove the protection given to the cement production industry in Mozambique in 20% to allow for greater competitiveness and, consequently, a reduction in the price.

According to AIM, which carried the news, the protection in place was for some large investments that have taken place in the country in recent years, namely Dugongo as the sole producer of raw materials, at a time when the country only had four plants with a capacity of 400,000 tons.

The sector now has almost ten plants and a capacity of 16 million tons.

The executive believes that investments are in their final stages of consolidation, especially in the south, and he is studying the need to open up the market so that competitiveness can generate quality and lower cement prices.

This government plan was confirmed to AIM by the national director of Industry, Sidónio dos Santos.

"Investments needed to take place in a protected environment and, at the moment, we have Dugongo as the only company producing raw materials," he said.

"And we knew that when we protected, there would be cartels or monopolies. We believe that the day we remove the protection, then we will better understand the dynamics of costs because other types of players will enter the market," he said, quoted in the publication.

Dos Santos recognizes that the protection given to Dugongo has killed off the competition, and the only way to understand the state of the market is to open up the industry again, at a time when investments of over 100 million dollars are being made at regional level to increase production.

"When we didn't have this protection, cement came from China, Pakistan and other corners of the world, but now there is no imported cement on the market," he said.

He confirmed that in the north, specifically in the province of Nampula, there is an investment that is in its experimental phase that could meet demand in that area, and the same scenario occurs in central Mozambique.

"We protected the cement industry so that there would be investment and that investment is happening. Now we're going to take other measures and the reduction in the price of cement will have to happen," he said.

The government is also discussing the issue of companies that produce cement and raw materials at the same time, to ensure that there is no conflict, since other plants need to buy raw materials locally for production and distribution.

"There is a question of competition and we have to adjust the regulations to take care of these aspects and allow for a healthy business environment in the sector," he said.

Also according to the source, the government is investigating an alleged sale of national cement "Dugongo" in neighboring South Africa at a relatively low price, compared to the prices charged in the country, recalling that when the company entered Mozambique it used the same strategy of lowering prices, creating problems that culminated in the closure of other competitors.

"Let us work on the situation. We are investigating. Dugongo started operating in that market, put up competitive prices, there was a petition and some companies closed down because of Dugongo's impact," he said.

It should be noted that the cement market in Mozambique is going through a turbulent period after the former presidential candidate, Venâncio Mondlane, decreed that the price of cement should be set below 350 meticais.

The decision is creating confusion among both producers and retailers who are forced to sell at a price below the purchase price.