Q: How would you describe cement manufacturing maturity in Botswana? What opportunities are we missing?
A: At the moment we have three local manufacturers. As a country with more than 55 years of independence, it is worrying that we are still importing cement from South Africa and neighbouring countries. I believe local players’ over 75 percent capacity means that they should be given priority ahead of imports in order to fully empower the local cement manufacturing sector.
Current capacity means we should only import less than 20 percent. However predatory pricing of imports is weakening our manufacturing resolve, depleting our capacity and human capital and skills development and the potential of reducing unemployment and increasing our economic impetus. We should be at a level of self-sufficiency in order to bolster employment creation, increase capacity and enrich the industry value chain. Companies which export at predatory pricing should be hit by border tariffs in order to protect our economic contribution of manufacturing.
Q: Explain the national cement demand versus current manufacturing capacity.
A: The country’s demand stands at approximately 600,000 tons per annum. Because of scarcity of data, we project that the three players can make up over 75 percent. Through the Botswana Cement Manufactures’ Association we hope the local players are in a position to work together with relevant government structures to make sure that demand is met internally.
Our unemployed graduates are subsidising regional players. Their jobs are being stifled by import predatory pricing. Manufacturing is the future of African markets because we have the largest youthful population in the world. We need to unlock manufacturing and secondary industries so they are part of the economic fabric of our republic.
Q: How would you describe the national appetite to encourage local manufacturers and use of local raw materials?
A: The Ministry of Trade together with the Botswana Cement Manufacturers Association has made good progress in ensuring that beneficiation of local raw materials is enhanced, key in this has been work that is ongoing at Morupule Power Plant to make sure that local ash meets the required specifications for cement production.
We haven’t made as much headway in bringing the Government to prioritise local cement producers on national projects, stop predatory pricing that is meant to undercut and undermine our effort as local manufactures. Full cement beneficiation will change our economic fortunes. I hope our government eventually realises our potential and uproots predatory pricing in order to continue attracting players and FDI to our economy, not imports when we have the capacity and potential to grow.
Q: What challenges are local cement manufactures facing?
A: Over the last three years, we have seen quite a few new players enter the market. It has always been our belief that competition is necessary not only to afford the consumer greater choice of product and sometimes better prices; it is also important for us as local manufacturers as it brings in new skills and technology.
It also makes us to continue to improve our efficiencies for the benefit of all. However, predatory pricing and imports threaten FDI, employment, industry value chains, skills development and full scale taxes due to the government. There is a projected additional thousands of jobs in cement manufacturing and its industry value chain alone if predatory pricing was addressed. This is urgent.
Q: What would be the ideal scenario to uproot cement imports?
A: We shouldn’t uproot it. There just shouldn’t be predatory pricing that affects the local economy.
Q: What are the advantages of having a manufacturing model versus an import model?
A: Manufacturing obviously assists in helping the country move from an import-led economy to one that develops skills and creates internal employment. There is also the issue of keeping the much-needed revenue in the country which can then help in further developing key national priorities