Displaying items by tag: Zambia

The latest piece of China-based Huaxin Cement’s global ambitions slotted into place this week with the news that it is preparing to buy plants in Zambia and Malawi. Its board of directors has approved plans to spend US$150m towards acquiring a 75% stake in Lafarge Zambia and US$10m on a 100% stake in Lafarge Cement Malawi. The move will gain it two integrated plants with a combined production capacity of 1.5Mt/yr in Zambia, and a 0.25Mt/yr grinding plant in Malawi.

This latest proposed acquisition represents the next step for Huaxin Cement in Africa following its purchase of African Tanzanian Maweni Limestone from ARM Cement in mid-2020. The company has also been busy along the more traditional Belt and Road Initiative land routes in Asia. It started up the kiln at its new 2Mt/yr Jizzakh cement plant in mid-2020. Elsewhere in Central Asia it runs two plants in Tajikistan and one plant in Kyrgyzstan via various indirectly-owned subsidiaries. While in South Asia it runs a plant in Nepal and in South-East Asia it runs one in Cambodia. If the plans in Zambia and Malawi pay off then it will give the Chinese producer a growing presence in East Africa, with plants in three countries.

The China Cement Association ranked Huaxin Cement as the country’s fifth largest clinker producer in 2021 with an integrated capacity base of just under 63Mt/yr. Domestically, the company operates 57 cement plants and most of these are based in the Yangtze River Economic Belt region. In 2020 it reported cement and clinker sales of 76Mt, a small decrease from 2019. Its operating income fell by 6.6% year-on-year to US$4.58bn and profit dropped by 12% to US$1.2bn. This performance was blamed on the emergence of Covid-19 at the start of 2020 and then floods later in the year.

Compared to the other larger Chinese cement producers, Huaxin Cement roughly appears to be holding rank with its overseas expansions. The leaders, CNBM and Anhui Conch, hold subsidiaries with plants in South-East and Central Asia and CNBM’s engineering wing, Sinoma, has a far bigger reach, building plants all over the place. Information has been scarce since mid-2020 on the long heralded 7Mt/yr plant in Tanzania due to be built by Sinoma and local subsidiary Hengya Cement. At that time local residents in Mtimbwani, Mkinga District were reportedly being compensated for their land. Other than this, one of the other big players internationally is Taiwan Cement. In 2018 it invested around US$1.1bn for a 40% stake in Turkey-based Oyak Cement. As well as a presence in Turkey this also gave it a share of plants in Portugal in 2019 when Oyak completed its acquisition of Cimpor.

Elsewhere this week, carrying some of the themes above with expansion in Central Asia, two new integrated cement plant projects were announced in Kyrgyzstan and Turkmenistan respectively. Meanwhile, Italcementi said it will invest Euro5.0m to restart clinker production at its Trentino cement plant in Sarche di Madruzzo, Italy. The unit has been operating as a grinding plant since 2015. This might be viewed as an unexpected decision considering the high local CO2 price but it shows some level of confidence in the local market by Italcementi and its parent company, HeidelbergCement. The next step will be when or if a European producer decides to build a brand new integrated plant in Italy or elsewhere.

Malawi/Zambia: China-based Huaxin Cement plans to spend US$160m towards buying cement plants in Zambia and Malawi. It intends to spend US$150m on purchasing a 75% stake in Lafarge Zambia and US$10m on acquiring Pan African Cement from Lafarge Cement Malawi. The former operates two integrated cement plants in Zambia with a combined production capacity of 1.5Mt/yr. The latter operates a 0.25Mt/yr grinding plant at Blantyre in Malawi. The acquisition is subject to regulatory approval in each of the relevant countries.

Zambia: Zambezi Portland Cement has allowed retail purchases directly from its integrated Ndola plant to reduce price exploitation. Chief executive officer Gomeli Litana said that the plant had made the decision to help small consumers, according to the Times of Zambia newspaper. He added that the producer was implementing a fixed price and was not attempting to interfere in the general retail market.

Nigeria: Dangote Cement says that the price of cement from its plants in Nigeria is the same as from plants in other countries in Africa or cheaper. The cement producer made the announcement in response to local media reports that its prices were allegedly lower in Ghana or Zambia, according to the Vanguard newspaper. It added that it had control over its ex-factory prices but that it could not set the end market price.

Dangote Group Executive Director, Strategy, Portfolio Development and Capital Projects Devakumar Edwin explained that Dangote Cement has a 60% share of the local cement market at present. Demand for cement has risen following the coronavirus pandemic and the company has had to suspend exports from its recently commissioned export terminals in order to meet local demand. He added that it has also reactivated its 4.5Mt/yr Gboko plant in Benue State, which was closed in 2018, to cope with the situation.

China: Sinoma (CNBM) International Engineering’s value of new projects grew by 9% year-on-year to US$5.3bn in 2020. Most of these projects came from growth in its construction business segment. However, new project value from its equipment manufacturing business fell by 5% to US$629m. By region, domestic new project value decreased by 3% to US$2.1bn but overseas new project value rose by 19% to US$3.2bn. The engineering company and member of CNBM group also reported that its US$480m project to build a 5000t/day clinker production line in Zambia for Central African Cement remains in the financing stage. The project was originally announced in late 2018.

Zambia: Dangote Cement Zambia says that it has no source of reasonably priced gypsum following the closure of Chambeshi Minerals. The Mast newspaper has reported that other local suppliers are quoting prices for the raw material in US dollars because of currency devaluation due to the weak economic situation following a coronavirus-related lockdown.

The immediate effect of the supply chain disruption has been a rise in cement prices. Copperbelt Provincial Minister Japhen Mwakalombe said, “For us to develop, we need infrastructure development. We can’t build without cement and our people can’t afford these prices. Quoting in dollars shows that gypsum dealers want to sabotage the economy and we need the law to address this. It shows that some companies are not patriotic and do not want to support the government of the day.”

Zambia: Sinoma Mpande Limestone has donated 1000 bags of cement for use in the construction of a new secondary school in Chongwe, Lusaka Province. The People’s Daily newspaper has reported that the community is responsible for a 25% contribution in addition to World Bank funding for the project. District Commissioner Robster Mwanza said that it was “hard pushed to meet this requirement” and that the cement would “go a long way” in helping.

Nigeria: Denmark-based FLSmidth has secured a contract with Dangote Cement for the supply of hot kiln alignment services for 16 kiln lines across Africa. 10 of the lines are installed across three plants in Nigeria, with the remaining six situated in Republic of the Congo, Ethiopia, South Africa, Tanzania and Zambia. The contract will endure until 2026.

Dangote Cement said that it chose FLSmidth to help it achieve ‘uninterrupted cement production and dispatch around the clock. Dangote Group deputy managing director Arvind Pathak said, “The equipment health audits, services, and support extended by FLSmidth have helped us maintain our pyro process equipment with good reliability. Hot kiln alignment is an excellent preventative maintenance strategy.”

FLSmidth says that it conducts 250 hot kiln alignments worldwide annually.

Zambia: The majority government-owned Zambia Consolidated Copper Mine (ZCCM) Investment Holdings has appointed Mabvuto Chipata its chair. ZCCM’s cement division faces the challenge of national overcapacity due to market saturation as it moves ahead with the US$600m construction of a 1.6Mt/yr integrated cement plant and 57MW power station in Masaiti, Copperbelt province. Thierry Charles, speaking on behalf of the Euronext minority shareholders, expressed relief at ‘the definitive turning of a page on several years of hazardous, inconsistent and disastrous investments.’

Zambia: Jimmy Khan, the chief executive officer (CEO) of Lafarge Zambia, has complained about production overcapacity and competition to the president of Zambia. He said that local cement consumption is 2.2Mt/yr compared to production of 5Mt/yr, according to the Lusaka Times newspaper. He made the visit to the president of the country to inform him of a 25% rise in the price of cement. Khan blamed the price hike on business losses.

However, Khan praised the government for its infrastructure development and said that the subsidiary of LafargeHolcim has moved much of its despatches from road to railway. At present the cement producer has a 33% market share. It also intends to continue using the Mpulungu Port in Northern Province to export cement to the east African market.