Lukala Cement, located in the southwest of DR Congo, will be closing down due to “the unfair competition it has faced since December 2015”, according to its CEO, Ola Ora.
The factory had been running at a capacity utilisation rate of below 50 per cent in recent times.
The company blames DRC’s government for allowing cheap imports of cement into the country.
Those importing the cement do not pay customs charges as it should be, and therefore the tendency is to suspend imports of products whose goal is to disrupt the economic situation.
Domestic cement demand in DRC is estimated at around 3 metric tonnes, but local production is limited to 0.5 metric tonnes creating room for imports but which has however been abused by unscrupulous traders, industry experts say.
Government officials admit there have been cases of illegal cement being siphoned in the country and had instructed its officers to be alert to arrest the culprits.
“Those importing the cement do not pay customs charges as it should be, and therefore the tendency is to suspend imports of products whose goal is to disrupt the economic situation in the country, including sugar, iron and cement,” said Modeste Bahati Lukwebo, DR Congo’s minister of national economy.
Lukala Cement had in 2015 announced plans to upgrade its cement plant at a cost of $80 million and which was expected to be commissioned in the second half of 2017.
For now, the company says more than 100 of its employees are facing an uncertain future.