Manufacturers propose 20% hike in surtax on imported cement bags

Zambia Association of Manufacturers (ZAM) has implored government to increase surtax on imported cement bags to 20 percent from the current 10 percent in an effort to protect the local market.

According to ZAM in its submission made to Ministry of Finance and National Planning on the 2024 national budget, Zambia has become a dumping ground for cement bags.

The manufacturers anticipate that increasing the surtax to 20 percent from the current 10 percent would encourage local cement producers to ‘Buy Zambian’ and local cement bag manufacturers would get a level playing field with manufacturers from other countries.

The current capacity of local manufacturers is about 100 million bags per annum which is more than double of total bags required by cement manufacturers in Zambia.

“Of serious concern is cement manufacturing companies based in Zambia importing packaging bags from other countries despite local manufacturers having the capacity to produce more than double the local Zambian demand.

“Local manufacturers are ready to provide all necessary information required by the government to show local capacity available with the capability to produce the right quality specifications,” the manufactures submitted.

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They pointed out that local demand for cement bags per annum was estimated to be about 45 million bags in the year 2022 out of which local manufacturers supplied only about 60 percent.

They expressed concern that even though local packaging producers had got capacity, cement manufacturing companies in Zambia were importing a significant percentage of their packaging requirements from other countries.

“Suppliers from countries like Tanzania are supplying at below-market prices (i.e., less than their own pricing in their home market) to Zambia. It is a case of dumping their products into our market at a marginal cost.

“Please take note manufacturers in countries like Tanzania have the twin advantage of bigger economies of scale and closer location to seaports to land polypropylene raw materials at low cost into their manufacturing plant without the need to pay for the long inland transportation route,” they noted.

The manufactures therefore indicated that government would gain additional revenues through increased surtax if all the local cement producers still choose to import.

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