Cabinet speeds up cement infant industry protection bill
Cabinet is considering the possibility of accelerating the process of gazetting infant industry protection mechanisms for the cement industry, which will discourage the importation of cheap cement into the country.
Namibia will soon solicit financial assistance from German to set up a one-stop-shop border post at Oshikango to facilitate the trade as well as exportation of Namibia’s cement into Angola and other neighbouring countries, according to statement from the Ministry of Information and Communication Technology.
The infant industry protection to the country’s only cement manufacturer, Ohorongo Cement Company, will, however, not be used to establish a market monopoly or arbitrary raise of prices without consultation and approval of Government.
Ohorongo is situated close to Otavi in the Otjozondjupa Region. Despite the high quality of locally-produced cement, Ohorongo is subjected to competition from more affordable imported cement, especially from China.
This in turn jeopardises the N$ 2,5 billion investments in the Ohorongo plant. In June this year, local media reported that Finance Minister Saara Kuugongelwa-Amadhila announced that the Namibian cement manufacturing industry was afforded infant industry protection (IIP).
However, that announcement raised fears that such a decision might open the opportunity for other cement manufacturers to be established and also benefit from the same IIP.
Reference was made to a specific situation which occurred when IIP was afforded to the pasta- manufacturing industry. Initially, Namib Mills was the only pasta manufacturer to utilise the IIP. Later, Bokomo Namibia established a pasta-manufacturing plant, and also benefitted from the same IIP.
Another concern raised was that the local cement-manufacturing industry might still be faced with competition from imports, albeit with an initial advantage. Production at Ohorongo commenced in December 2010, and the first locally-manufactured cement left the plant during January 2011. All raw materials required for the cement-production process, namely limestone, shale, marl, iron ore and gypsum are sourced locally.
Namibia is currently a net importer of cement, with a production capacity of 700 000 tonnes of cement per annum. The Ohorongo plant is able to supply about double the current demand of the local market.