Hiked power tariffs push up prices of building materials

Twiga cement factory in Dar
The price of building materials have started to go up following a recent increment of power tariffs of over 40 per cent per unit.

A 'Daily News' spot survey on Thursday showed that the price of Twiga cement from Tanzania Portland Cement Company (TPCC) has increased to between 14,500/- and 15,500/- per a 50 kilogramme bag—depending on the location.

This follows the factory decision to increase prices to wholesalers last Monday. The agents now sale the 50-kilograme bag of cement at 14,000/- irrespective of retailers’ vicinity in the city.

Traders at Wazo Hill are reported to have taken advantage of their proximity to the manufacturer to increase price compared to those in Mwenge, Mbezi Tanki Bovu and Tegeta. The highest price was observed at Tabata and Kigamboni suburbs where the 50kg is sold between 15,000/- and 15,500/-. 
 
A cement trader at Tanki Bovu, Kassimu Mussa, said they were since Monday notified by their agent about price rise, which attributed to recent increase in power tariffs.

“Business is slow and with this price increase, business will move from bad to worse,” Mr Kassimu said.   He said in a good day he sells about 50 bags, which comes once in a blue moon: “in most cases I sell about 25 bags a day.”

Mr Mussa, who also sells cement blocks, said the down spiral of the price effect would increase the prices of blocks from current 1,000/- to 1,200/- for a six inches block.  But Tanki Bovu Containers’ Salesman, Mr Godwin Lema said builders would continue to buy cement, notwithstanding the price rise because construction works have to continue.

“What I am suspecting is that builders will reduce the amount of bags to purchase, but construction has to go on,” Mr Lema said.  The Dennis Hardware Salesman, Venance Colman, said other building material prices would also go up to factor in the costs of electricity announced mid last month.

“This will affect our cash flows dearly because at the moment business is slow and things will worsen if prices of other building materials start going up,” Mr Colman said.  He said the price of water and wash-and-wear paints has gone up before factoring in the recent power tariffs rise.

The price of water paint went up from 28,000/- to 30,000/- for a 20-litre bucket while price for wash-and-wear paints has shot from 125,000/- to 135,000/- for the same volume.  Steel round bar prices also increased from 12,000/- to 19,000/- for 12 mm and 16,000/- to 33,000/- for 16 mm round bars. This increment was observed last April. 

Twiga Cement Commercial Director confirmed to the 'Daily News' about the price hike but gave neither further details nor his name, saying he was not the company’s spokesperson. “It’s true that the prices have gone up, but my friend I am not the spokesperson, please contact the managing director,” the Director said. The MD was outside the country. 

Twiga Cement has an installed capacity of 1.4 million tonnes with 350 employees.  Bank of Tanzania Director for Economic Policy and Research, Dr Joe Masawe said fortnight ago that the central bank is studying the recently effect of power tariff increment and its impact on the macroeconomics fundamentals.
Source: The Daily News online
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