HomeBusiness DigestCoal crisis hits Circem

Coal crisis hits Circem

Staff Writer

CIRCLE Cement Ltd (Circem) says it has one month of coal supply left in its reserves.

Company cha

irman Ian Coulter yesterday said: “With the recent closure Wankie shareholders must realise we are in a crisis. One month of supply is not comfortable but we are talking to Wankie to find a solution to the problem.”

The company said it was due to present new price proposals to government on May 13.

Coulter said the company’s viability was hinged on the outcome of the price talks with government.

Cement has been removed from the price control list and is now a monitored product.

Under the new arrangement producers would fix the price in consultation with the Ministry of Industry and International Trade.

A profit margin of 20% would be permitted since the products are not subsidised.

The ministry would be approving the wholesale and retail margins under this category.

Cement industry sources said the move would revive the waning fortunes of the company as the controlled price was below the cost of production.

“The price of cement does not tally with the cost of production,” the source said.

In an interview in March, Circem managing director Isaiah Bingwa said the company, which had been shut down, would reopen if coal was available and if the price of cement was reviewed.

“We are pushing for both price review and the availability of coal,” he said.

“The price of cement needs to be reviewed for the company to be viable.”

But this week Bingwa could not shed light on the price they are pushing for. “I cannot comment on that,” he said.

The controlled price is $511 and industry sources said the cost of production which is over $200 was contributing 40% of the cost per bag.

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