Displaying items by tag: Middle East and North Africa region

PPC revealed plans this week to build a new cement plant in the Western Cape region of South Africa. It has entered into a “strategic cooperation agreement” with Sinoma Overseas Development Company to put together a 1.5Mt/yr integrated plant for around US$160m. It is hoped that construction will start in the second quarter of 2025 with commissioning scheduled by the end of 2026.

CEO Matías Cardarelli described more details about the project during a tie-in webcast on 16 January 2025. Specifically, the new unit will be built at the company’s integrated Riebeeck Plant site due to the quality of the local limestone and the greater reserves. In addition, all the key environmental approvals and mining rights have already been obtained. Both this plant, and the nearby De Hoek Plant, will continue to run throughout the construction and commissioning period. A decision will then be made about required staffing. PPC did not explicitly say whether the two old plants would be closed but the new plant will “replace and increase the existing capacity” at the other sites.

Points to note from the announcement start with the low cost for the clinker production line. PPC’s 1Mt/yr line at its Slurry plant cost around US$75m when it was commissioned in 2018. Sinoma also built that one. However, negative currency exchange effects make comparisons tricky. In 2015 PPC said that the cost of the Slurry line was around US$115/t. It pointed out that the price was low as it was a brownfield investment. This compares to US$107/t for the Western Cape project, another brownfield project. Other recent integrated plant projects in Sub-Saharan Africa to consider include Cemtech’s clinker plant in Sebit, Kenya (US$170/t) or West International Holding’s forthcoming plant in Buikwe District, Uganda (US$150/t). Plans for a new PPC plant in the Western Cape go back to at least 2017 when the then CEO Johan Claassen said it was preparing for a ‘mega plant.’ At the time it was hoping to replace its Riebeeck plant with a ‘semi-brownfield’ facility that would use around 25% of the current plant’s equipment. The scheme had actually been around longer but Claassen remarked that insufficient domestic demand had held it back.

The next detail to consider is that PPC is planning to build this new plant within 100km of the coast. This was addressed directly with PPC saying that the new plant would be “extremely competitive” against imports. They say it will be able to produce cement, at least, to a similar cost to imports from Vietnam. It was also remarked that only 10 - 15% of the 1Mt/yr of imports, mainly from Vietnam, go to the Western Cape with the rest heading to KwaZulu-Natal via the Port of Durban.

PPC’s plans in Riebeeck are part of its ‘Awaken the Giant’ development strategy. For its six month financial results statement to September 2024 it said that it had “early positive and encouraging signs in all lines of our business.” In South Africa its earnings were up despite lower sales volumes. Dangote Cement’s local subsidiary, Sephaku Holdings, reported a similar picture with a small bump in revenue and earnings back up after coal and fly ash supply constraints a year earlier. PPC isn’t the only cement company developing capacity. Huaxin Cement-owned Natal Portland Cement was reportedly investing US$65m in the autumn of 2024 towards expanding its Simuma Plant in KwaZulu-Natal.

The cement sector in South Africa had a couple of ownership changes in 2024. As mentioned above, China-based Huaxin Cement bought Natal Portland Cement from InterCement at the start of the year. Then, Afrimat received approval to buy Lafarge South Africa in April 2024. Both of these incomers have clear ambitions to expand in the industry. In this context PPC’s decision to finally revive its Western Cape plans, before whatever its new competitors devise, makes sense. Expect more talk of capacity upgrades in the future.

Algeria: Lafarge Algeria has launched Chamil cement, a 40% reduced-CO₂ cement, which contains locally sourced clay and ferrous materials. The producer developed Chamil cement based on technology from the Rouiba Construction Development Laboratory.

Lafarge Algeria aims to achieve export volumes of 3Mt across its product range in 2022.

Middle East/North Africa: The World Cement Association (WCA) has called on its members in the Middle East and North African cement sectors to take new actions towards industry decarbonisation. UAE-based consultant and WCA member A3 & Co has said that companies in the region have the potential to cut their carbon footprints by up to 30% with no new capital expenditure required. The Middle East and North Africa accounted for 15% of global cement production in 2021. In the region, only the UAE and Saudi Arabia have committed to national net zero carbon targets, for 2050 and 2060 respectively.

WCA CEO Ian Riley said “There has been a lot of discussion in Europe and North America about decarbonisation roadmaps for the cement industry and good work has been done to start on this journey. However, 90% of the world’s cement is produced and used in developing countries; to impact overall industry emissions we must include these stakeholders. Cement companies in the Middle East have some low hanging fruit to take advantage of, which will lower costs at the same time as reducing CO2 emissions. At WCA we have a number of programmes that can help them realise this opportunity."