Weak shilling pushes up cement prices

The rising rate of cement prices might negatively affect the construction industry. FILE PHOTO.

What you need to know:

Growing expenses. The fact that cement companies import most of the inputs used in manufacturing cement have seen their expenses grow by at least 3 per cent.

Kampala. The weak shilling has led to an increase in the prices of cement, according to dealers.
Available data indicates that factory prices have risen from Shs28,100 to Shs29,100 for every 50-kilogramme bag.
The increase, according to dealers, is a result of the weak shilling which has led to the increase of in puts most of which are imported.
Retail prices across Kampala stand at between Shs29,500 and Shs30,000 up from Shs28, 500.
Mr Patrick Mugenyi, the Hima Cement commercial manager, said: “The price has been driven by depreciation of the shillings against the dollar. We have to factor in expenses that we are incurring to import some inputs.”
He said they have had to increase their expenditure by more than 3 per cent to produce a 50-kilogramme bag of cement.
The prices, he said would increase further if the current volatility exhibited by the shilling continues.
Mr Simon Ssekankya, the Hardware World managing director, one of the country’s biggest cement dealer said the increase in prices was not good for business.
“The spike in cement prices is driving our sales down as customers have started to opt not to buy,” he said.
The trend could be affecting gains in the manufacturing and building sectors as data from Uganda Bureau of Statistics released in the last half of 2014 showed a drop of about 10 per cent in the construction residential properties compared 0.1 per cent for commercial properties.
The drop suggests that the industry might be affected in terms of performance if the volatility in the prices of cement is not corrected.

The numbers

The amount of money in shillings that dealers are quoting as factory prices for every 50-kilogramme bag.

The amount of money in shillings that retailers are quoting for every 50-kilogramme bag of cement across Kampala.


Negative impact. The increase in prices of cement is likely to negatively affect the construction industry which in October was reported to have slowed by about 10 per cent.
Revised prices. Two of Uganda’s biggest manufacturers including Hima Cement and Tororo Cement have already revised their factory prices.
Impact of shilling. The shilling, which has since November depreciated by more than 12 per cent, has driven the cost of inputs up, most of which are imported from Kenya and European countries.