Tokyo Cement and INSEE ramp up supply to meet cement shortage

Tokyo Cement is stepping up cement production to meet a current shortage, operating its cement manufacturing plant in Trincomalee at the maximum installed capacity of around 170,000 MT per month but attributes several reasons including the long delay in opening LCs as part of the problem.

Dr. Harsha Cabral PC, Chairman of Tokyo Cement said the company will continue to supply cement island-wide at the highest output levels.

In addition to local production at maximum capacity, the company has been importing 30,000 MT of bulk cement per month through the Tokyo Cement Colombo Terminal. 

 Dr. Cabral further states that on a request made by the Government, Tokyo Cement has made special arrangements to import an additional 12,000 MT of cement per month as an immediate contingency measure to alleviate the cement shortage currently prevailing in the market.

He said the shortage of cement in the market was due to multiple reasons that are beyond the control of the company.  “First is due to the unavailability of bulk cargo carriers to ship raw materials as well as cement as a finished product. 

Secondly, considerable delays are encountered in opening LCs with the banks, wherein a process that would typically happen on the same day would now take weeks. 

These factors contribute in varying degrees to the current cement shortage in the market,” he added.

Cement industry officials said the shortage of foreign exchange has exacerbated the problem.

The company is currently expanding its manufacturing plant in Trincomalee to increase local production capacity by a further 1 million MT by deploying state-of-the-art technology.

Sri Lanka’s INSEE Cement, a unit of Siam City Cement of Thailand said it was adding two ships to boost supplies as forex shortages cut off imports to the island disrupting construction.

INSEE which has an integrated cement plant Puttalam and also a grinding plant in Galle said it was already producing and importing 3.6 million metric tonnes to meet demand. 

Sri Lanka’s government initially created a shortage by imposing price controls as the rupee fell and forex shortages were created by printing money.

However though price controls were lifted, importers were finding it difficult to resume supplies and forex shortages continue to be experienced. 

“Unfortunately now, they are struggling to revive the interrupted supply chain due to cement exporters struggling to meet the demand in their own countries,” Gustavo Navarro, Chief Executive Officer at INSEE Cement said. 

  “INSEE Cement is optimizing its express logistics, delivery channels and bulk carrier fleet to ensure uninterrupted market supply to customers as well as winning business from competitors.

Jan Kunigk, Executive Vice President, Sales, Marketing and Innovation, claimed the country should reduce dependency on imports as exporting nations traded opportunistically.

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