The Manufacture of Cement in Malawi 2023

Introduction

This report covers the manufacture of cement, limestone plaster in the Malawi. Malawi’s cement industry is dominated four major players, and is under threat from low cost imports and an illegal industry that is said to account for almost a third of sales. Demand for cement will be driven by urbanisation and population growth that will result in demand for housing, and increased government infrastructure development projects, particularly roads. Challenges of power blackouts may be reduced as the government plans to rehabilitate and modernise the power system. Opportunities

Exporting cement, lime and plaster to other African markets.

Government efforts in developing small-scale quarrying and artisanal mining. Rising urbanisation rate and population presents building and construction opportunities, which will drive demand for building materials. Small-scale quarrying and artisanal lime-making offer small business development opportunities. The migration to low carbon processes and products offers the possibility of new revenue streams.

Outlook

For Malawi to meet current housing demand, about 21,000 new units must be constructed in the next 10 years.

In May 2022, the government announced plans to build 10,000 houses for the defence force, police and prison service at a cost of US$345m. The projects will benefit the cement industry. A US$257m project will rehabilitate, upgrade and modernise Malawi’s power system which will reduce blackouts. Increased energy availability is critical for cement industry growth.

Report Coverage

This report covers the manufacture of cement, limestone and plaster in Malawi.

It includes information on the state and size of the industry, its major players, developments and significant influencing factors, including illegal and cheap imports, input costs, the economic environment and opportunities for SMEs and entrepreneurs. There are profiles of six companies including the four major players Shayona, Cement Products, Portland Cement and Bwanje Cement, as well as notable industry role players Terrastone and Balaka Limestone Supply Company.

Strengths

Government tax incentives.

Industry operators are committed to restoring land disturbed by limestone to its original state. Malawi has limestone and gypsum deposits. Malawi has the raw materials, clinker and cement production capacity to meet the requirements of the domestic market. Proactive initiatives have been implemented to lessen the industry’s carbon footprint. The industry is innovative and undertakes research and development and is harnessing digital technologies.

Threats

Adverse and extreme weather patterns.

External geopolitical threats and global macroeconomic pressures, which could result in lower levels of investment and donor aid. Funding gap in infrastructural development. Persistent smuggling and the influx of cheap imports. Slow industrial drive.

Weaknesses

Corruption is still a major problem. High inflation rates. Inadequacy of local distribution networks. Policy uncertainty. Poor technology infrastructure. Shortages of foreign currency. The cement industry is energy intensive. The industry is dominated by four large players. There are frequent power outages. There is a shortage of highly technical skills and semi-skilled labour. Transportation networks are underdeveloped, and distribution costs are high.