Lafarge Zambia Plc has bemoaned the high saturation of the cement industry in the country. Lafarge Zambia Plc Chief Executive Officer Jimmy Khan says the cement industry in Zambia is over supplied and heavily competitive.
Mr Khan said Zambia’s cement consumption stands at around 2.2 million tonnes compared to a production of about 5 million tonnes.
Mr Khan told President Lungu at State House in Lusaka yesterday when he paid a courtesy call on him that his company recently hiked cement price by 25 per cent to stay in business.
Mr Khan said his firm made losses of about K43 million due to many players coming in the sector and that management saw it fit to increase prices in order to stay afloat and operate.
He praised government for the infrastructure development and said his company has moved much of its cargo from road to railway as it pushes to regain a fair share of the market which stands at about 33 per cent.
Mr Khan said Lafarge will continue to use the Mpulungu Port in Northern Province to export cement to the east African market.
He proposed to government to consider the option of building concrete roads as an alternative to the costly bituminous ones.
And President Lungu said government remains committed to supporting the private sector as the engine for economic growth and development.
President Lungu said government’s decision to retain the Value Added Tax, VAT, as a system for collecting tax as opposed to the proposed Sales Tax demonstrates that government is willing to listen to the business sector in order to ensure that the economy meets stakeholder expectations.
The president said government is negotiating for a financing facility with the World Bank to expand and improve the port facilities at Mpulungu in order to boost cargo business and exports to East Africa.
And Special Assistant to the President for Press and public relations Isaac Chipampe told journalists in an interview that President Lungu has encouraged private companies like Lafarge to consider engaging in environment friendly business activities and operations.
Mr Chipampe said President Lungu urged the private sector to invest in recycling operations as opposed to burning products such as plastics, which harm the environment.
He said the Head of State says government will continue to encourage the private sector to use railway as the alternative to road transport for transporting cargo in order to safe roads from damage.
He said recycling ventures can help create employment for youths in the country.
Cement was a hot commodity when lafarge enjoyed a virtual monopoly. This is what the sugar industry needs as well, about 5 more big players to knock ZS off its perch and bring the price of sugar down.
Bloody capitalist being taught his own lessons of free market now crying to the President to control the market. If it’s oversubscribed construction should spike. And look for markets elsewhere Ala!
Zambian citizen, maybe you should just cut down on your sugar intake.
Take me for example, I have cut down from 4 tea spoons to…wait for it…half a tea spoon.
That means the sugar I buy now lasts 8 times longer than it did before.
But I agree, competition is good.
You increase the price to stay in business??…or you reduce the price when there’s too much competition and over supply….which one is it?
It looks like people just comment without reading…the article says Lafarge has increased the price by 25%….and yet Cement is saturated…it doesn’t make sense
Until Lafarge (La Fraud) publicly apologise to Zambia for abusing us with high cement prices when they had a monopoly (before Dangote came into the Zambian market) I personally shall NEVER (and I emphatically say again) NEVER buy even 1 pocket of Lafarge cement. I would rather even support Sino Cement or stop building if it happens that they remain the only supplier.
When you want to hide anything from a black man put it in writing….we dont even read articles….just commenting….no wonder Bazungu are Stealing from us in broad daylight….people just read the headline and rush to comment…..and the Lusaka Times Internet google Journalists cant even see that the article doesn’t make sense
Slowly Dangote is making his footprint in the cement business in Africa. Usually, those that enjoy monopoly for longer periods of time find it difficult to cope with competition. What’ll happen to Lafarge when Dangote opens his second plant? We still have Pemba cement from Tanzania which Dangote aims to cloud out as well
It’s a pity no Zambian is in the industry just as no Zambians are in many industries. Sugar! Ha the Zambians are can cutters the exporters are French
I do not understand , the explanation of increasing the price when the market is flooded
its a pitty the same dangote creating competition to lafarge is the one that is not even following the countries labour laws dangote employees cant even afford to buy the same cement they produce but look at lafarge, its employees even add revenue to government through taxes but dangote what do they add? i wish our president woke up on day and realised that economy is the people of the country not foreigners….even bembas say “ichalo bantu” some companies no matter how big they are its better they dont even invest in a country better lafarge invest in so many cement plants coz it will employ people with good conditions same with zambia suger compared to mansa suger, mansa suger is the same as dangote. they ae not adding any value to the countries economy they are here to mock zambians…
Do you think those chaps that assemble Aston Martins can afford to buy one? Or those packaging caviar can afford to buy it?
It does not work like that.
Zambians are very lazy, always complaining, waiting for handouts, always begging.
its a pitty the same dangote creating competition to lafarge is tlone of the waste paying cement company in zambia whilst lafarge still remains the best n our government cant even do anything to ensure zambians get a fair share of the saling product but the money is busy going to india i dont know if its nigeria. wish lafarge made a lot of cement plants in zambia not dangote
Why do you want to force us to read badly written articles? Read them yourself and make out for yourself what they are saying
Do we read articles before commenting or we are all educated morons? Basic economics teaches us that when there is over supply or saturation the price of commodity will go down. Why is the price of cement going up of the market is saturated????
I love Zambia, indeed, you’re talking of supply and demand and free market economy. It may appear to me that Larfarge is lying. How can Larfarge embark on raising the price of cement when there is saturation of the comodity? So what does Larfarge want the GRZ to do?
Why do you want to force us to read badly written articles? Read them yourself and make out for yourself what they are saying.
Why should lafarge increase prices? They had monopoly in this
Business all these years so its time
To make less profit now.let them calculate what they were making all
Larfarge has in the past enjoyed its fair share of the Zambian market. Competition is good for such an industry like cement so that the commodity price is lowered. However, Larfarge has defied the ecomomics principle of ‘high supply of commodity resulting in low prices’.
This so because larfarge does not want to feel the pain of low sales, which ultimately leads to less revenue. Therefore for them to continue making huge profits on a saturated market, they have hiked the price so that they make more profits on less sales. It therefore comes back to us the consumers to decide which brand to buy, the hiked larfarge cement or the other suppliers, putting into consideration quality and customer preferences.
This Lafarge is stupid.How dare he talks like that?If the Zambian market is over supplied then why are more private players still coming into the industry?…to play?
Larfage has had a bloated cost structure in Zambia.The more you monopolize the more you spend unnecessarily but when smaller and more agile players come in it has become difficult for them to dismantle their cost structure in order to remain competitive.This is happening to most of these global players with operations in the developing world.Barclays,Stanchart,Larfage,Zambia Sugar(Ilovo),Parmalat,etc.It is either they compete or sale to other players with with the right cultural intelligence and who think global but act local.
Good. Ba Lafarge muzamuziba Yesu. You made us buy cement at 75 kwacha. I hope more players come on the market to make Lafarge irrelevant. Our aim is have cement so cheap that those tuma mud houses in Bembaland can be replaced by manyumba ya ma bloko
Mr Khan, the man from Larfage is not making sense. If the market is over supplied how come the price has gone up from K53 to K76 per bag over the last 3 months. If price is a function of supply and demand one would have expected a price drop. By his own admission the Larfage man says he has increase the price by 25%.. how can you do that in an over supplied market? And by the way…what was he doing at state house?
You can ask that question again. Why don’t they meet line ministries??
Sir, are you aware that Sinoma and Dangote have also increased prices during that same week? At least Lafarge have had the decency to explain why price increase. Secondly, it is not just about demand and supply if the macro economy is struggling how do you expect businesses to thrive. Then ask yourself why is fuel going up? maize etc?
I like what is happening in the cement industry. the more plyers we have the better the competition and the more affordable (I wouldn’t dare say cheaper), the prices become. Similarly as the stupid banks increase their lending interests on loans, we are saying continue with your stupidity as we go the village baking way. I have just finished roofing my house after 12 months of village banjking which I failed on a Barclays loan in 5 years.
Mwandi Mr president, this company held Zambians at ransom when they were the only players in town…………
Tell them to enter the real estate bussiness and build townships…..
Zambians, lets just stop buying LaFarge cement, these crooks have stolen too much of our money for too long. Is there any justification to increase their cement price from K65 to K80 when everything else (inputs) remain unchanged? This is outright robbery. I hope other players keep their cement prices lower but maintain and keep quality and we shall support them. Just imagine today with our Kwacha pegged at K13, how much could we have been buying cement if other players didnt come on board?
Lafarge is not the only cement company to increase prices. If you are building you will notice that ALL cement company’s have increased their prices. Secondly, inputs have not remained the same, if they did prices would’ve never gone up.
The economic environment is hostile nowadays. Cant blame Lafarge. High electricity cost and operational costs are obviously hitting hard. when u observe generally all cement companies are changing prices too.
Lafarge has the best Cement on the market, the market dynamics justify the price increase
Lafarge Zambia, has the decency to explain the increased cement price because the cost of doing business is high. Fuel has gone up which is used to fire the kiln 50,000 liters is used. Electricity has gone up, spare parts are bought from over seas and paid in Dollars (the devaluation of the Kwacha increases the cost).
Lafarge gives you quality cement and pays it’s taxes and pays it’s employees well.
Lafarge cement is the cement to buy.
Do you have any reliable source that input costs have remained the same? i think you need to get a little bit more informed on that one.
This is a free market economy kwamana. President can’t bring in price controls. Viva Dangote, viva Sinoma, viva great wall. Let lafarge die. Tizadya nsima pamalilo,.
Thank you Dangote. Get lost Khan. Your reasoning does not add up!
Lafarge is the best hand has been here for a long time over 70 years compared to Dangote only 5 years.
Saturated market and you hike the price???New economics or foolishness….
The production cost has remained the same so the only way to keep the company going is by price increases.
Unless if we see a fall in the power and fuel then the price will fall.
Hope this makes sense.
Start building concrete roads and bridges.
What *****ic actions are those from Lafarge? You increase the price in a saturated market. This Khan character obviously has no clue what he is doing?
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