Lun 5 Nov 2012 12:26
C/belt contractor urges more quarry mining investments
Blockman Concrete Manufacturers managing director Lwipa Puma said the construction business was facing challenges to have timely supply of raw materials because of the limited number of quarries on the Copperbelt.
Dr Puma, who is a former deputy minister in the Minsitry of Health, said there was high demand for flux stones used for block making and concrete mixing in the construction industry.
He said as a result, some suppliers such as Ndola Lime were facing challenges to efficiently meet the market demand.
Zambia is experiencing massive growth in the construction and real estate sectors of the economy, creating room for more players to invest in the sector.
Dr Puma said quarry mining was still being considered as high-risk areas by many business executives because of the heavy borrowing needed for one to invest.
“An investor needs an investment of K15 billion for one to come up with a quarry mine which is capable to meet the needs of the growing construction industry on the Copperbelt and North-Western regions but one needs to have collateral first before finding a bank which is ready to pump in such a huge sum of money in the business,” Dr Puma said.
The Chinese-made intelligent block making machine at the construction firm, based in Ndola’s heavy industrial area, uses the latest technology on the local construction scene which consumes 200 tonnes of flux stones per shift and needs 10,000 tonnes per day if it works at full capacity.
“As Blockman Concrete Manufacturers, we recently paid K200 million worth of flux stones for over 3,000 tonnes, but we have only collected that which is worth K70 million and we are waiting to get the remainder,” he said.
He said although the construction industry was growing at a fast rate, it was being associated with high risks such that few indigenous Zambian investors were entering the business.
Dr Puma also said that high interest rates were affecting the growth of the construction sector.
He observed that an impression that the base rate was fixed at nine per cent was an academic exercise because the reality on the ground was that interest rates being offered by commercial banks were about or more than 18 per cent.
In a normal situation, banks are supposed to add two per cent interest above the base rate.
Dr Puma said there was need for the Government to work closely with commercial banks and see how best the two parties could come up with a win-win situation in reducing interest rates.
He said this is needed to stimulate economic growth and investment in some sectors of the economy such as construction.