FRANCISTOWN: The managing director (MD) of Matsiloje Portland Cement (MPC), Rachit Josh has said that it will be difficult to re-open the company unless the government moves swiftly and puts in place measures to restrict the importation of cement into the country.
The company which operates a cement manufacturing plant in Matsiloje, near Francistown, is a 100% subsidiary of Nortex. The company closed in January last year in a move that resulted in over 150 people losing their jobs.
Josh highlighted that lack of protection from South African firms is one of the main reasons the company was forced to close.
In June last year the Ministry of Industry, Trade and Investment said that it was in the process of introducing restrictions on the importation of cement. The ministry said that the move was meant to foster employment creation in the sector as well as contribute to economic diversification. However, it remains unclear as to when will the restrictions will be implemented. Josh told Monitor Business that for years SA firms have been facing low demand for their products (cement) in their home country and have been crossing into Botswana where they sell their products below the market price. “What they (SA firms) are doing is killing the market and unless there is strong protection (in the form of import restrictions) from government it will be difficult to re-open the business,” he said.
“Zimbabwe, Nambia and SA have measures (import restrictions) in place to protect their market while Botswana does not have. “When we were in operation we constantly reduced prices until we reached a point where we felt that it was not sustainable to continue running the business. We had hoped that the business environment will change for the better but things did go not as we had anticipated.”
Since it started operations in 2010 MPC has constantly complained about the influx of SA cement in the country.
According to Josh, in the past company executives met with government officials in a bid to seek protection from SA firms. He said that the government promised that it would introduce import restrictions on cement but the move is yet to materialise.
Josh added that the company has failed to recoup the P40 million it invested in the business in 2009. The money was used to rehabilitate the manufacturing plant.
“We do not owe taxes and we have repaid loans from commercial banks. What we have not been able to do is to recoup the money the shareholders invested in the business,” he said.
He added that there was lack of support towards their business from both the government through initiatives such as the Economic Diversification Drive (EDD) and big players in the construction industry.
“We do not know why we never got the support from the government and the construction industry because our products are of desired quality and BOBS certified,” he said. Josh further noted that the company’s troubles were also worsened by the collapse of the Zimbabwe market, after import restrictions there.
“For sometime our products did fairly well in Zimbabwe. However the government of Zimbabwe later decided to restrict the importation of cement in order to protect their country’s cement industry in a bid to boost the manufacturing sector. We also made losses amounting P1 million because some Zimbabwean companies we dealt with did not pay us.”
MPC had an annual turnover of around P20 million and produced 30 000 tonnes of cement (on an annual basis) according to Josh. The company also produced the lime it used for its cement. It sourced other raw materials from Morupule (fly ash) and South Africa respectively. Last year, government said the proposed cement import restrictions would require that 70 percent of the product be sourced from local manufacturing companies.