By Patrick Jaramogi
KAMPALA, Uganda: Uganda is known for having the good will to host foreign investors, but new revelations have started to indicate that some investors take this great offer for granted to the detriment of the end users, who are the consumers. TheSpy can exclusively report that some investors dive in for a quick kill with little regard to the future consequences especially when buildings start to collapse due to low quality cement.
But the good news now is that Uganda National Bureau of Standards (UNBS) is not seated. It has raised a red flag after if carried out quality checks by its standards watchdog which indicated that the latest market entrants in the Cement industry, Simba Cement quality has deteriorated.
The UNBS quality testing team that spoke to our investigation team revealed that Simba Cement which started well has had its quality compromised of late. Currently there are four main cement factories in the country namely: Tororo Cement Limited, Hima Cement Limited, Kampala Cement Company Limited, and latest market entrant-Simba Cement Uganda Limited.
Market share rankings of Uganda’s Cement: The latest (December 2018) market share statistics indicate that Tororo Cement Limited still tops the pack with over 3 million tonnes manufactured, followed by Hima Cement Limited with 1.9 million, Simba Cement Limited with 1.0 million and Kampala Cement Company with 0.9 million totaling to 16.8 million tones produced annually.
Who are behind Simba Cement?: Simba Cement plant located five miles along the Tororo – Mbale Highway is a branch of Simba Cement of Kenya. Launched in 2018 by President Museveni. Simba Cement has the capacity to produce over one million metric tons of cement annually. But Simba is not alone in this new competition with just less than a kilometer from its plant in Tororo, Hima Cement has also started production in its new US$ 40m (shs145b) plant that will see its cement production capacity increase from the current 0.9 million metric tons to 1.9 million metric tons.
More stiff competition expected: Cement prices have already started falling, after new entrants Simba set foot in. A bag of cement that mid last year went as high as Shs55,000 (US$15) dropped to as low as Shs25,000(US$6) by December 2018.
TheSpy can reveal that perhaps this price is set to drop even further when market leaders, Tororo Cement, who rule over 60% of the market share, completes its US$ 50m plant upgrade from the current 1.8Mta to 3Mta.
Speaking about the development, Tororo Cement Process Manager, Peter Karanja, said: “We are the market leaders controlling 60 per cent of the market share. We are also setting up a bigger plant that will double our production.” Tororo Cement will be expanding its own capacity in the area with an investment valued at US$50m, raising capacity from 1.8Mta to 3Mta.
According to Daniel Petterson, CEO of Hima Cement, Tororo presents an opportunity for better access to limestone. The access to limestone is mainly in Moroto, where Hima is exploring. The company was due to secure a mining lease by the end of 2018 after determining the quantity of limestone. Additionally, the northeastern part of Uganda is one of the remaining areas in the country with viable limestone deposits, which may offer some explanation for the expansion drive around Tororo. “The construction sector in Uganda is rebounding as shown by the sustained increase in demand for cement; currently at 10 per cent per year. Our capacity expansion drive aims at meeting this demand for not only within Uganda but the regional market as well,” Mr. Petterson said. Uganda’s domestic consumption of cement is estimated at 2.2Mt.
However, the existing factory capacity is about 2.6Mt. Another 100,000t is imported from Kenya, United Arab Emirates and Ethiopia, among others. The State Minister for Industry, Michael Werikhe said the increased expansion of factories in Tororo presents opportunities for Uganda to export to the Democratic Republic of Congo, Rwanda and South Sudan. “The increased production levels should also facilitate the reduction in cement prices,” said Werikhe.
Will quality be sustainable?: With the national domestic supply of cement reaching 7 million tonnes, the key question now remains if the quality of cement will be maintained. UBOS statistics indicate that Uganda produced 2,468 million metric tonnes of cement in 2016. But these figures have increased after the two leading cement manufacturers, Tororo and Hima Cement upped their production. Tororo now produces over 3 million metric tonnes while Hima has hit the 2 million mark. Kampala Cement which is based in Mukono has a capacity to produce about 1 million metric tonnes.
Quality issues arise: just in less than a year after it was commissioned, issues regarding low, and or compromised quality have begun to arise. Insiders within the standards watchdog UNBS which is mandated with monitoring quality revealed to us in confidence that quality tests done on Simba Cement had dropped.
“We also do routine and surprise quality checks on commodities that we get randomly from the market. What we have at hand is that the quality standards of Simba Cement have dropped,” said the source at UNBS linked to quality assurance standards and checks. Without revealing much, the source added: “Simba Cement has been of high quality, but these are the issues we encounter when doing routine quality checks, sometimes the tests fail, but after sometime when we test again they pass.”
The Executive Director UNBS Dr. Ben Manyindo couldn’t pick our repeated calls when contacted for a comment, but the UNBS Principle Public Relations Officer Godwin Bonge Muhwezi said: “What I know is that Simba Cement is certified and has a Q Mark. We, as UNBS do conduct routine quality tests but I am not aware about the drop of the quality standards of Simba Cement. I will crosscheck with the lab team to ascertain when the last tests were carried out.”
Mr. Narendra Raval, the chairperson of Simba Cement Uganda Ltd, similarly couldn’t pick our calls when contacted for comment.
How to detect that cement quality is bad
- The colour of cement gives an indication of excess lime or clay and the degree of burning.
- RUBBING. Take a pinch of cement between fingers and rub it. …
- HAND INSERTION. Thrust your hand into the cement bag and it should give cool feeling. …
- FLOAT TEST. …
- SMELL TEST. …
- PRESENCE OF LUMPS. …
- SHAPE TEST. …
- STRENGTH TEST.