Cement firms risk US$75m losses from port delays - Report

Ghana’s cement manufacturers could incur as much as US$75 million in demurrage costs by the end of 2026 if the current cost of port delays persists through December, increasing pressure on cement prices and construction costs.

The projection is based on figures from the Chamber of Cement Manufacturers, Ghana (COCMAG), which estimates that the industry accumulated between US$45 million and US$50 million in demurrage costs from January to August as clinker vessels spent longer periods waiting to discharge.

At the upper end, the US$50 million incurred over eight monthsof 2026 so far translates into an average cost of about US$6.25 million a month. Maintaining that rate for the remaining four months would add another US$25 million, taking the industry’s full-year demurrage bill to about US$75 million.

At the lower end of COCMAG’s estimate, the same calculation puts the potential full-year bill at about US$67.5 million, leaving manufacturers facing between US$67.5 million and US$75 million in demurrage costs if the January-August average persists.

The mounting cost has already forced manufacturers to pass part of the additional expense through the market.

COCMAG has introduced a temporary GH¢12 clinker demurrage surcharge on each bag of cement, comprising GH¢10 before tax and GH¢2 in applicable taxes and levies. The measure followed an emergency meeting of manufacturers on August 28.

The Chamber said the charge is not a general increase in cement prices but a temporary measure to recover exceptional demurrage costs. It is scheduled to remain in place until December 31 and will be reviewed monthly based on developments at the ports.

Vessel waiting times have increased sharply during the year. According to COCMAG, clinker vessels waited an average of about seven days in January, but delays had stretched to between 30 and more than 40 days by August.

Industry estimates put vessel demurrage at approximately US$27,000 a day, meaning a clinker vessel waiting for 30 days could accumulate about US$810,000 in charges. A 40-day delay would push the cost to roughly US$1.08 million, broadly matching COCMAG’s estimate of between US$800,000 and US$1 million for individual delayed vessels.

Ghana’s dependence on imported clinker leaves local cement producers particularly exposed to prolonged vessel delays and rising demurrage costs.

COCMAG attributes part of the congestion to limited berth availability. The Chamber says only three main berths are currently available for clinker discharge at Tema Port, while Berths 10 and 11 remain inaccessible to cement manufacturers and importers.

It is seeking increased berth capacity, restored access to the affected berths and measures to reduce vessel waiting periods.

Manufacturers have also warned that continued congestion could stretch clinker shipment cycles to almost three months, increasing the risk of delays in raw-material supplies to cement factories.

Such disruptions could affect production schedules if manufacturers are unable to receive clinker in sufficient quantities to maintain operations.

The port costs are already feeding into cement prices and construction expenses.

The GH¢12 surcharge increases the cost of cement for construction companies, property developers, infrastructure contractors and households, adding to project costs even without a separate increase in the underlying ex-factory price.

COCMAG has indicated that the surcharge could be adjusted or withdrawn if port congestion eases and demurrage costs decline.

The uniform charge has attracted competition concerns. CUTS International’s West Africa Regional Centre said manufacturers are entitled to recover additional costs but questioned the collective setting of a GH¢12 surcharge by companies competing in the same market.

CUTS West Africa Director Appiah Kusi Adomako said individual manufacturers should determine how additional demurrage expenses are reflected in their prices, while the industry collectively engages government and the Ghana Ports and Harbours Authority (GPHA) to address the congestion.

The growing demurrage bill also represents an additional foreign-exchange cost for the industry, since vessel charges are largely denominated in dollars while cement is sold domestically in cedis.

At the upper-end projection of US$75 million, the industry’s demurrage bill would be US$25 million higher than the estimated US$50 million already accumulated by August, unless vessel turnaround times improve during the final four months.

COCMAG is engaging government and GPHA over increased berth access and measures to shorten waiting times, while continuing monthly reviews of the surcharge.

Any sustained improvement in vessel turnaround times would reduce the industry’s full-year demurrage bill. If the January-August cost rate persists, however, cement manufacturers could close 2026 with US$67.5 million to US$75 million in demurrage expenses.