Cement sales decline by 3% on power cuts

Expectations are high among cement producers that there will be a recovery in consumption this year after a sharp fall in sales last year on accounts of the recent power supply challenges in the country.

B&FT has gathered that cement sales, which is used to gauge activities in the construction sector, suffered about three percent decline last year when compared to the volume of cement sold a year before.

Data available to the paper shows that more than 4.13 million tonnes of cement, equivalent to about 82.6 million bags, were sold last year, which is less than the 4.26 million tonnes- about 85.2 million bags- sold a year before.

The shortfall, according to the cement producers, was due to the energy challenges and slowdown in demand.

Nonetheless, the construction sector last year experienced a 3.3 percent growth, which is a better performance than the previous year when construction growth stagnated. In 2013 however, when cement sales soared, the construction sector expanded by 8.6 percent.

Some officials of a couple of domestic cement manufacturers, who asked not to be named because they were allowed to talk to the media, are buoyed by the semblance in the stability in energy supply and the impending general polls to scale up production.

This, they argued is evident in the sales volume last year, when consumption fluctuated throughout the first nine months but picked up in the last quarter of the year when a number of thermal generation facilities came on stream to contain the intermittent power cuts.

Additionally, the producers are confident the execution of a number of capital projects especially in the construction sector in the lead up to the elections in December this year will help to increase cement sales.

The optimism is in spite of the fact that government’s capital expenditure at the end of May this year was GHC1.88 billion; below the budgeted capital spending of GHC2.76 billion in the same period.