On 30th May CemNet Newsroom reported that Uganda’s government has back-tracked on initial plans to call in cement imports because local manufacturers have stabilised prices. Cement prices had risen sharply in April, following cement shortages. In April, the Kasese-based Hima Cement said it was receiving little electric power supply, which forced irregular operation of the plant while Tororo Cement blamed it on its routine plant maintenance.
This illustrates the multiple strategic risks that cement companies face. On the one hand the need for routine plant maintenance is a fact of life rather than a risk. That is why inventories of finished cement and semi-finished clinker are held on cement factories. In the case of Tororo Cement were those inventories high enough? On the other hand cement cannot be produced without electricity. But did Hima Cement anticipate receiving little electric power supply? What contingency plans did they have in place? Did either anticipate that the government would invite imports into the country?
It is to assess and manage such risks that cement companies should engage Whitehopleman to undertake a risk audit.