Displaying items by tag: Uganda

Kenya: Bamburi Cement’s turnover rose by 3% year-on-year to US$168m in the first half of 2022 from US$164m in the same period of 2012. However, its profit before tax tumbled by 89% to US$1.03m from US$9.25m. The subsidiary of Switzerland-based Holcim attributed its rising turnover to mounting sales volumes and rising prices. However, it blamed its falling profit on “significant inflation of the fuel prices, logistics costs and imported clinker prices in both Kenya and Uganda.” It added that it expected the local market to improve after the Kenyan general election in August 2022 and growth in infrastructure spending in Uganda propped up by the oil industry.

Kenya: Bamburi Cement’s net profit was US$11.9m in 2021, up by 22% year-on-year from 2020. The company attributed the growth to increased domestic selling prices in Kenya, due to a higher proportion of premium products sales and targeted price actions in the retail segment.

Managing director Seddiq Hassani said that he envisages cement demand growth in Bamburi Cement’s markets in the rest of 2022, supported by a stable economic environment. He looked optimistically to possible export growth arising from the Democratic Republic of Congo’s admission into the East African Community (EAC) in March 2022. He further noted the impact of the Rwanda-Uganda border closure as a downside risk.

Uganda: Preliminary findings into a fire at Hima Cement’s integrated plant at Kasese that took place on 16 January 2022 have revealed lapses in health and safety rules. Three people were reported killed in the blaze and a further eight others were injured, according to the Daily Monitor newspaper. Following an inspection of the site, Flavia Bwire, the executive secretary of the National Building Review Board (NBRB), said there were inadequate entry and exit points for the staff to evacuate the building. The NBRB will make recommendations to the relevant authorities when it has concluded its investigation. Hima Cement, a subsidiary of Switzerland-based Holcim, said that staff were conducting installation work at a light diesel oil tank when the incident happened. Production at the plant is yet to restart.

Zimbabwe: Lafarge Cement Zimbabwe appointed Geoffrey Ndugwa as chief executive officer (CEO) in mid-December 2021. He succeeds Precious Murena, who stepped down in September 2021.

Ndugwa was previously the CEO for Lafarge Malawi from late 2019. He brings experience in the cement industry spanning over 17 years working in various capacities across Africa. Some of his notable appointments include being the Commercial Director for Bamburi Group in Kenya, the General Manager Innovation and Marketing for Lafarge WAPCO Nigeria, the General Manager for Bamburi Special Products in Kenya, the Head of Business Support for Barclays Bank of Uganda and the Sales Manager for Hima Cement in Uganda.

Ndugwa holds a master’s degree in Business Administration from Heriot-Watt University in the UK, a post graduate diploma in marketing from the Chartered Institute of Marketing in the UK and a Civil Engineering degree from the University of East London.

Uganda: Security provider G4S has installed solar powered laser security systems for Hima Cement at one of its plants and several mines. The system was commissioned in March 2021 and it uses chargeable solar cells in perimeter security towers. G4S says that the system will improve sustainability and reduce costs compared to conventional alternatives. Where sensors detect a breach, security guards will investigate using electric bikes. The supplier says that the bikes facilitate more covert operations compared to motor vehicles, in addition to having sustainability benefits.

Head of technology Samuel Tebandeke said “We wanted to challenge ourselves to think of a better solution for our customer. We knew that we wanted to introduce electronic perimeter security to enhance the protection for the three mines and the cement plant we protect. Other providers were proposing laying many kilometres of cabling underground to provide power for their electronic perimeter monitoring, but our team decided to investigate a greener solution.”

Uganda: LafargeHolcim subsidiary Hima Cement has launched Fundi masonry cement. The company says that the product has a lower carbon footprint than Ordinary Portland Cement (OPC). It is suitable for use in plastering, brick laying and mortar works.

Hima Cement Uganda chief executive officerJean-Michel Pons said, “Fundi is an application-based cement that is formulated with enhanced capabilities for masonry and plaster works. The customer is guaranteed improved workability, affordability and beautiful finishes.” He added, “In addition to addressing the application needs for masonry works, Fundi masonry cement is now the greenest cement on the Ugandan market. Fundi is produced with a reduced carbon footprint, with 54% lower CO₂ emissions in comparison to OPC.”

Democratic Republic of Congo/Uganda: The Democratic Republic of Congo has increased its imports of cement from Uganda by 30% to 90,000t in the two years since 1 February 2019 compared to the two prior years. The Daily Monitor newspaper has reported the reason for the increase as a Rwandan ban on Ugandan goods across the East African countries’ border. This contributed to a 3% fall in Uganda’s value of cement exports to US$59.9m in the 2020 financial year from US$61.5m in the 2019 financial year.

Uganda: Hima Cement has introduced Kafluu, a chatbot-led initiative that lets customers order products via WhatsApp. The subsidiary of LafargeHolcim says that customers can use the platform 24 hours a day, 7 days a week to manage their orders and transactions. The automated chatbot software guides customers through the ordering process, gathering specifics like the product type, number of bags, delivery site and payment options. Payment is available via MTN MoMo Pay or bank transfer.

“We are always looking to improve the customer experience and Kafluu is able to respond quickly and effectively, enabling customers to place orders, make payments and input their delivery information with ease,” says Israel Tinkasimiire, the Hima Cement Sales Director.

The initiative is being piloted in Mbarara first before rollout in the rest of the country.

Uganda: The Uganda Development Corporation has announced that its subsidiary Moroto Ateker Cement is ready to begin construction of a 1.2Mt/yr integrated cement plant in Moroto District. The New Vision newspaper has reported that employees are clearing land and erecting a fence around the site. The company says that cement production will follow 18 months after the start of construction of the complex, which will also produce lime and marble. Senior engineer David Ekanya said that 600 local people will be directly employed in the plant’s operations.

It was previously reported in 2016 that Moroto Ateker Cement is a 51:49 joint venture of the state-owned Uganda Development Corporation and Savannah Mines.

Rwanda’s newest cement grinding plant is set to start commissioning at a great time. Last week Milbridge Group subsidiary Prime Cement said that its 0.6Mt/yr grinding plant in Musanze, Northern Province was preparing to start up in August 2020. This week the main local producer, Cimerwa, announced that it was setting standardised cement prices in an attempt to control speculation in the market following a shortage. According to local press, spikes in prices have been caused by an urgent supply tender from the Ministry of Education, which has started a large-scale project to build over 20,000 classrooms. Prime Cement is unlikely to make a difference to this particular shortage but its timing is spot on.

Graph 1: Cement production capacity/population of East African countries. Source: Global Cement Magazine & Global Cement Directory 2020.

Cement price surges in land-locked African countries crying out for construction materials are not new but it’s always illuminating to review how the situation is changing. Rwanda’s sole 0.6Mt/yr integrated plant is run by Cimerwa, a subsidiary of South Africa-based PPC, near Bugarama in the south-west of the country, close to the borders with Democratic Republic of the Congo (DRC) and Burundi. The new grinding plant is located in the north-west near the borders with DRC and Uganda. It will join another grinding plant run by Kenya’s ARM Cement at Kigali.

PPC’s operation in Rwanda has performed well in comparison to a poor market back home in South Africa. For its financial half year to September 2019 Cimerwa reported revenue growth of 28% year-on-year to US$31.2m due to a 20% increase in sales volumes. Earnings rose even more in percentage terms due to higher volumes and an improved cost per tonne performance, likely due to a debottlenecking project. More recently, PPC said that its operations in Rwanda were disrupted in April 2020 due to a coronavirus lockdown that started in late March 2020. It partially resumed operations in the second half of April 2020 with cement sales volumes for the month expected to be 15 - 20% of those in April 2019. The other point of note is that the Rwandan government was trying to sell its minority share in Cimerwa in mid-2019 but nothing has been publicly announced since then. However, Cimerwa was reported as being in the process of listing on the Rwanda Stock Exchange in May 2020.

Rwanda’s other grinding plant at Kigali has had problems with its parent company in Kenya. ARM Cement went into administration in mid-2018 and its assets have gradually been sold off since then amidst legal wrangling. It has also had ongoing operational issues with interrupted production due to clinker and coal shortages caused by import issues with Tanzania. An attempt to sell the 0.1Mt/yr grinding plant in September 2018 failed when an auction didn’t even reach one tenth of the estimated market value of US$1.4m. The plant was still reportedly on sale in May 2020.

The new Prime Cement grinding plant will have a production capacity of 0.6Mt/yr. It has been supplied by Germany-based Loesche, who installed a Loesche Jumbo CCG (Compact Cement Grinding plant) with mill type LM 30.2. The project has been reported to have a cost of around US$65m. A second phase was also mentioned at the time of the initial announcement that might include upgrading the grinding plant to a fully-integrated one at a later stage. Time will tell. In the meantime though it will be interesting to see whether the new plant has the same raw material issues that ARM’s Kigali Cement has had. One potential source of clinker is the integrated Hima Cement at Kasese in Uganda. Bamburi Cement reported in May 2020 that its Hima Cement subsidiary in Uganda was unable to ‘access’ the market in Rwanda in 2019 due to ongoing trade problems across the Rwanda-Uganda border.

Rwanda’s cement consumption has been reported to be 0.7Mt/yr so a new combined national production capacity of 1.4Mt/yr seems likely to create significant exports. Other countries in the region have also noticed what’s going on in Rwanda and want to do likewise. In June 2020 DRC’s Industry Minister Julien Paluku talked up plans of reviving the 0.3Mt/yr state-owned National Cement Plant (CINAT) in Kimpese. He noted that DRC has been partly reliant on cement produced by Cimerwa in Rwanda, which has been serving a combined demand of 900,000t/yr in DRC and Burundi.

A statistic that received a fresh airing this week was one from the World Bank in 2016 that worked out that the price of cement in Africa was on average 183% higher than the global average. It popped up in a news article about the expanding Nigerian cement industry but it applies to the whole continent. While it continues to hold true, exports will boom and plants will keep being built in the places that exports can’t reach.