Namibia’s construction industry has warned that the approval of the proposed Whale Rock Cement (Pty) Ltd/Schwenk Namibia (Pty) Ltd transaction could increase the cost of public infrastructure and housing projects by reducing competition in the country’s cement market.
The Construction Industries Federation of Namibia (CIF) said the ministerial approval of the transaction risks concentrating control of one of the country’s most critical construction materials, potentially leading to higher cement prices, weaker competition and increased costs for contractors, government and consumers.
The warning follows Industry, Mines and Energy Minister Modestus Amutse’s decision to overturn an earlier ruling by the Namibia Competition Commission and approve the acquisition of Ohorongo Cement, subject to conditions including no job losses, continued operation of the Cheetah Cement plant, post-merger monitoring and increasing local ownership to at least 40%.
However, CIF argues that the conditions fail to address the transaction’s most significant risk: the loss of effective competition in Namibia’s cement industry.
“Cement is too important to Namibia’s economy to be controlled through an overly concentrated market structure,” CIF Chief Executive Officer Bärbel Kirchner said.
“This is not about being against investment. It is about protecting fair competition, local capacity and Namibia’s future infrastructure development.”
The federation said cement is a strategic input for public infrastructure, affordable housing and commercial construction, meaning any reduction in competition could have widespread consequences for project costs, procurement and the long-term sustainability of the construction sector.
Following the publication of the minister’s decision, CIF surveyed members across the construction value chain to assess the industry’s views on the transaction.
The survey, which received 38 responses, found that almost all respondents regarded competition between cement suppliers as important, while nearly 90% expect cement prices to increase either moderately or significantly if the transaction proceeds.
Respondents also raised concerns about reduced service levels, preferential supply arrangements, discriminatory pricing and diminished opportunities for Namibian-owned contractors and small and medium-sized enterprises (SMEs).
According to the federation, the approval conditions do not include any mechanism for monitoring cement prices, despite unanimous support among respondents for price oversight.
CIF also noted the absence of explicit safeguards against discriminatory pricing or preferential supply arrangements, warning that local contractors could face disadvantages in accessing competitively priced cement.
The federation further criticised the condition requiring the continued existence of the Cheetah Cement plant, arguing that it does not guarantee ongoing production, employment, supply security or competitive pressure in the market.
Similarly, CIF said the requirement to increase local ownership to 40% does not in itself ensure fair pricing, equal market access, transparent governance or stronger participation by local contractors.
The federation also questioned the reliance on post-merger monitoring, arguing that intervention after the transaction has been implemented may come too late to prevent anti-competitive outcomes.
CIF said the decision comes at a time when Namibian-owned contractors are already under pressure from limited participation in major infrastructure projects, warning that greater concentration in the cement market could further weaken local construction firms and undermine the country’s long-term infrastructure development.
“Conditions cannot easily replace real competition. Once effective competition is removed, the industry may only be left with monitoring after the damage has already occurred. This is not adequate to protect the interests of our industry, public and private end users, and our economy at large,” Kirchner said.
The federation has called on the government to reconsider the approval and ensure that the long-term interests of Namibia’s construction sector, local contractors, SMEs, suppliers, consumers and national infrastructure development take precedence over the commercial interests of the merging parties.
