Cement shortage looms as power cuts to industry bite

The country’s major cement producer Ghacem says the ongoing power cuts to manufacturing industry have reduced “significantly” its output level, prompting fears there will be a shortage of the commodity in the next few days.

The ongoing power rationing exercise means that the cement manufacturer’s weekly output of about 58,000 could see a more than 10 percent decline.

The Electricity Company of Ghana (ECG) earlier this month announced that it is cutting power supplied to industries by as much as 25 percent in order to create an artificial reserve margin to stabilise the power sector, which it said is under immense pressure to meet rising demand.

Under the announced load-rationing regime for industries, manufacturers will have a blackout for 48 hours, before enjoying what the power distributor described as “uninterrupted” power for six days — after which the process restarts.

But commenting on the impact of the power crisis, Dr. George Dawson-Ahmoah, Ghacem’sStrategy and Corporate Affairs Director said: “This load-shedding management has reduced our production. We are not able to produce at our full capacity”,

Dr. Dawson-Ahmoah explained to the B&FT on the sidelines of a stakeholders’ meeting on power supply to industry organised by the Association of Ghana Industries that: “We all know the consequences of our inability to produce at full capacity. It results in getting supply to the market short, and thus resulting in an increase in the retail prices”.

A bag of Ghacem cement is being sold on the open market at an average price of GH¢30 and the imminent fall in supply could lead to an increase in the commodity’s price in the coming days as the effects of the power cuts are fully realised.

The stakeholders’ meeting was called at the instance of the AGI, which invited stakeholders in the power generation, supply, and distribution chain to explain the nature of the power situation to its members.

The Planning and Business Development Officer of the Volta River Authority (VRA), Kofi Ellis, in explaining the power supply plan for 2015 to the Association of Ghana Industries (AGI) in Accra last week said: “2015 is going to be a relatively difficult year”.

According to him, the country’s major power production plant, the Akosombo Dam, is already running below its capacity as it is running only five of its six units.

The situation, he said, has been worsened by an overdraft on the water reserves of the dam, which was done in anticipation of a rise in the water level to compensate for usage from the reserves.

source : B &FT