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‘Cement ‘war’ good for building industry’

BY: Dennis Agyei Boateng

Competition in the cement industry has been identified as a fundamental tool to ensure that cement becomes affordable.

The Centre Coordinator for CUTS International, Mr Appiah Kusi Adomako, said such competition in the market was healthy because it led to lower prices of goods and services, provided better service and wider options for consumers, stimulated innovation and, more importantly, efficiency in the allocation of resources.

The dialogue was dubbed “Cement Market: Competition or unfair trade practice” and was organised by CUTS International Ghana to commemorate World Competition Day 2016.

 Mr Adomako stated that anti-competitive practices, including cartels, abusive monopolies, predatory pricing, collusive tendering and exclusive market sharing agreements, among others issues, had negative effects on both consumers and producers.

Speaking at a policy dialogue in Accra, he said, “becoming a monopoly is not a crime but abusing the monopoly is the problem.”

Competition heated up

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Mr Adomako explained in his presentation that in the past, there was no competition in cement and GHACEM enjoyed monopoly for about 35 years. In 2002, Diamond Cement came into the industry, which made it a duopoly and, at it stands, competition has been heated up with the presence of Dangote cement.

“There has been issues and allegations in the cement industry because the profit of GHACEM has been reduced but these issues have to be investigated to see if it is true or false before the necessary action can be taken,” he added. 

He also mentioned that the key drivers of cement prices in Ghana were taxes, forex rates which affect exchange rates, factors of production in terms of energy as well as labour and production shortages.

In the discussion, the Executive Secretary of Ghana Road Estates Development Association (GREDA), Mr Sammy Amegayibor, acknowledged the fact that what was happening in the cement industry was very disturbing and if it was not tackled, Ghanaians could not bear the consequences.

Dangote’s threat

Mr Amegayibor noted that Dangote Cement was enjoying the market because it received subsidies of 30 per cent that made its price less than the other products.

He stressed the fact that consumers did not look at the quality and brand they produced but rather focussed on the profit.

“Some brands of cements are not good for building but suitable for plastering, but consumers do not know so they buy any brand due to interest in price and when their buildings start to collapse, they complain. Consumers must be educated on the brands they should use and which one is suitable,” he said.