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02.04.2007 General News

Don’t Force Our Hands • President Warns GHACEM

In a rare display of indignation, President J.A. Kufuor has expressed concern about the current high prices of cement on the local market and warned the Ghana Cement Works Limited (GHACEM), the sole local manufacturers, to check the trend otherwise the government would be compelled to revoke the monopoly it enjoys in the country now.

Receiving a delegation from GHACEM at the Castle, President Kufuor alleged that the company distributed cement to needy institutions as a mere public relations smoke screen, portraying itself as being socially responsible.

The delegation, led by the Chairman of the Board of Directors of GHACEM, Mr Jean-Marc Junon, who is also the Chief Operating Officer of Hiedelberg Cement in charge of Africa, was at the Castle to hold discussions on the current price hikes of cement in the country and the way forward.

Ghacem Limited was founded by the Government of Ghana in collaboration with Norcem AS of Norway, on August 30, 1967.

In 1993, the government of Ghana sold 35 per cent of its shares to Scancem (formerly Norcem). As a result of the sale, Scancem had 59.5 per cent shares leaving the government with 40 per cent and 0.5 going to a local investor.

In 1997, the government sold five per cent of its 40 per cent shares holding to workers of the company. Two years later, the government sold the remaining 35 per cent to Scancem, bringing the shareholding of the Norwegian company to 93.1 per cent with the workers having five per cent with the remaining 1.9 per cent going to a local investor.

In 1999, Heidelberg Cement in Norway took over Scancem and made GHACEM a subsidiary of the company.

President Kufuor recounted a personal appeal he made to Heidelberg Cement in Norway in 2004 to reduce the price of cement, which consequently led to the reduction in the price of cement by $2 by GHACEM.

Since the temporary price reduction, President Kufuor said, the price of cement on the local market had been skyrocketing.

Since December 4, 2006, the ex-factory price of 50kg bag of cement (GHACEM Super Rapid brand) has been ¢59,225.00 while the ex-factory price per 50kg (GHACEM Extra) has been 62,675.00.

At the depots of GHACEM in different areas of the country, the price of 50kg bag of cement ranges from ¢61,000 in Accra, ¢66,500 in Kumasi to ¢79,800 in Wa.

However, a 50kg bag of cement is currently selling around ¢90,000 on the open market.

President Kufuor said GHACEM was giving an impression that it was not a reliable partner.

He said many constructional projects were being executed at the current stage of the country's development, a situation which had necessitated increased demand for the product by contractors at reasonable prices.

Unfortunately, he said, prices had kept on rising, a situation which could adversely affect the construction industry.

Mr Jean-Marc said the company shared the sentiments expressed by the President but attributed the inadequate supply on the market to the energy crisis.

He gave promised that the company would take measures to boost supplies with importation of cement from Togo.

Last week, the Ministry of Trade, Industry, Private Sector Development and PSI issued a statement to the effect that there was no restriction on the importation of cement into the country.

Consequently, it asked any person or company seeking to import cement into the country to do so without any hindrance.

A release issued by the ministry in Accra, said “it has come to the attention of the ministry that individuals and companies interested in importing cement into the country are not clear about the existing government policy on the importation of cement into the country.

“The ministry, therefore, wishes to inform the general public that there is no restriction whatsoever on the importation of cement in any form, whether as a finished product or in terms of its raw material component”.

The country has been hit by a shortage of the product since last year following the inability of GHACEM to produce enough to meet the huge market demand.

The shortage has affected the cost of cement on the market as prices of the product are being quoted at almost twice the original price from the GHACEM factory.

Story by Nehemia Owusu Achiaw