The price of cement, which continues to rise, despite self-sufficiency in national production, was one of the topics discussed with the economist and former administrator of Nova Cimangola, Albino António “Carnaval”. For him, Angola recently faced external shocks because of its dependence on technical means. He says that companies are suffocated by several factors that contribute to inflation, which he considers to be an invisible tax.
He was directly linked to the cement industry through Nova Cimangola, where he became an administrator for the Financial area. These days, how do you characterize this industrial segment?
She is fine. We currently have five production units, two in Luanda, one in Cuanza-Sul, and two in the province of Benguela. Among them, Nova Cimangola is best positioned, and is even the market leader. It has a share of approximately 50% and places approximately one million and 200 thousand tons of cement on the market per year. At least, that’s what the latest numbers reveal. This company had a three-year recovery cycle, which was completed in 2021, which allowed it to have a comfortable position in the market. Its production has already reached 90% of its installed capacity. It is in better competitive conditions compared to the others, since it is autonomous in terms of clinker production, selling to other units and also exporting. Therefore, at the moment they export cement and clinker. It is not in vain that last year it received the award for best exporting company in Angola, outside the oil market.
We have five companies in the sector fully operational, with cement for internal consumption and export, as well as clinker. Even so, we have constant price variations and are always on the rise…
Price formation depends on several factors and cement is no exception. We have a lot of equipment that is imported. The macroeconomic context is not favorable. What’s more: Angola is affected by external shocks and also internal pressure. External shocks result from the instability of suppliers of equipment and other resources used in factories. As we know, we still import many things from Europe, a continent that has various types of instability, from political-military to economic, with a rise in inflation. We have inflation that I would say imported, or rather, induced.
Domestically, the rise in the price of gasoline, although it may not seem like it, had a major effect on prices in general. Another issue, from the macroeconomic forum, is the exchange rate crisis we have. Companies have expenses with suppliers and have to pay in foreign exchange. In the specific case of Nova Cimangola, we know, for example, that it has to pay off debts resulting from the installation of the new production unit, located in the district of Sequele, in Cacuaco. The idea I have is that companies are suffocated by these things. Inflation, for me, is like an invisible tax.
When some constraints that impacted price changes are overcome, do you believe that a bag of cement can be sold at a lower price?
When the macro-economic context is stabilized, I believe we will see a price reduction. It may not be like before, but a slight reduction. It is important to note that prices do not fall the way inflation falls. It takes some time and is not proportionate. Prices are aligned depending on the competition. There is a considerable reduction in works, especially by individuals. Therefore, there is less purchase of cement. May or may this not harm the accounting of cement companies? Yes, it can harm the little ones. Those who have stability will not resent it. In the case of Nova Cimangola, the effect may be slight, as it has a market that transcends national borders. I estimate that cement consumption should be around 1.6 million tons per year.
To what extent have external shocks had such an impact on price formation, particularly in the cement industry, when we even have clinker to export?
It is true that we have enough clinker, but there are other inputs that are part of cement production that have to be imported, as we do not yet have the capacity to produce them internally. This is the case of replacement equipment for the machines that operate in this large industry.
So, from a technological point of view, we haven’t advanced much. Or is it not quite like that?
Yes, we have made great advances, with cutting-edge machines in the production units. We are talking regarding an integrated industry that was previously limited to producing cement in its generic form, but today has other products in its portfolio, such as glue cement, mortars and clinker itself. We are moving forward.
Let’s talk now regarding exports. Angola is working on insertion into the continental and regional market. But, when we talk regarding cement exports, we look at Democratic Congo. Do you think there is a lack of ambition?
We have taken good advantage of the Democratic Congo market, with a considerable population and, in fact, the country with the largest population in the southern region. So there is a lot of consumption. We have surplus clicker which, instead of being there idle, should be exported and sold domestically. Angola has a favorable strategic position and can achieve this by conquering the continent or competing for the market. By continuing the process of economic diversification, we will be able to compete with other countries on the continent.
Do you think there is a need for more investment?
The cement industry and other sectors of the economy need to be boosted. We all know that a large part of the products we consume are imported and that the main source of obtaining foreign currency is oil, constituting a critical factor for Angola. We have to take advantage of comparative and competitive advantages so that we can compete. When we talk regarding cement exports, we immediately think of Nova Cimangola. What is happening with other companies? They are somewhat limited in terms of production and equipment. And this means that they do not make the most of the opportunities that the African and regional market offers.
As a person with extensive experience in the sector, do you think the quality of Angolan cement is the best?
We do have good quality, laboratory-proven cement. And proof of this is that large construction companies only use national cement, even to build large structures, such as bridges, viaducts and others that can be seen throughout the country. No other than the national one. And there’s no reason for that.
The poor quality of cement can impact the quality of the work. And isn’t that the case in Angola, currently?
We don’t have that risk. And as I said, the poor quality of the cement can indeed impact the quality of the work. And we have superior quality cement. And I speak with great confidence, as I know of cases in which national cement was sent abroad for analysis, in independent laboratories, and obtained certification. I’m talking regarding quality and resistance.
And how is the industry supporting the cement sector?
There are companies that outsource services, such as the production of paper bags, with good quality, in terms of logistics and distribution, as this is a product that remains bagged for some time and is taken far from the factory. You need to be safe!
Today we also look a lot at employability, especially because there is a lack of jobs for young people. Does the sector add a lot of labor?
It is a capital-intensive industry that employs a lot of people. We have many young people employed, directly and indirectly, who help the country grow through this sector. And we have staff at the most varied levels who support existing industrial units in the country.