Your lifelong project, brick by brick

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[Article from LexpressProperty Magazine 74 (April - May)]

Is it finally time to build the house of all your dreams? A difficult decision given the instability of the real estate market in recent years. After all, material prices have only been rising.

Are you considering taking the big step? Before prices rise even further, let’s have a look at the situation.

Expert Opinion: Dominique Billon - CEO of Kolos Cement Ltd

Can you tell us about the current state of the construction market in Mauritius?

It remains committed, dynamic, and innovative despite recent turbulences such as the Covid-19 pandemic, the Russia-Ukraine conflict, persistent inflation, the depreciation of the rupee against the dollar, high-interest rates, maritime freight, and rising fuel prices. The sector manages to be resilient and recorded a growth of 6% in 2022 compared to 2021.

However, many challenges await the sector in 2023, including the continued pressure on the cost of diesel, the energy crisis that is increasing the cost of energy, as well as the exchange rate that has increased by more than 10% between January 2023 and March 2023, and over which sector actors have no control.

The recent government decision to impose control on cement bag prices is not considered as a solution to solve the overall increase in construction material prices and relieve Mauritians. This regulation will have repercussions on our ecosystem and represents a threat to the jobs and activities of our customers and hardware store partners.

How does your company meet the construction needs of Mauritians?

Kolos has invested heavily in research, development, and innovation in recent years. This investment now allows the company to meet the demand of each client - corporate and individual. Kolos has the ability to bring reliable cements to market that are suitable for the technical specifications of large works and individual home constructions.

Furthermore, in line with digitalization, consumers can now buy cement online on the website mosima.koloscement.com.

During the health crisis in 2021, Kolos introduced 400,000 bags of Kolos One, a structural cement that meets Mauritian standards and criteria to ensure the continuity of individual construction sites and to help Mauritians who are struggling to continue building their homes. In 2023, Kolos continues to offer its solidarity cement to the public.

How does your company adapt to current challenges?

Current challenges, such as persistent inflation, rupee depreciation against the dollar, and fluctuating exchange rates, lead to a difficult situation for Kolos. We are recording a decrease in our revenues because we cannot adjust our selling price. This is a very delicate situation because we have already optimized all expense items. If nothing is done to restore the situation, we are considering other measures that will directly affect the customer service.

The government’s decision to regulate the price of cement means that Kolos no longer has a margin to absorb increases, as we have done so far. The management of Kolos has started internal discussions to review our business model and implement cost reduction strategies to maintain the course.

If we fail to pass on an increase, we will have to consider reducing the size of the bags sold or even suspending the sale of some products. However, we are committed to ensuring that our products are of the best quality and meet the needs of our customers.

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