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Displaying items by tag: Zimbabwe
Zimbabwe: Lafarge Cement Zimbabwe plans to increase its cement production capacity to 0.5Mt/yr once a current plant upgrade is complete, according to an official. At present Lafarge reports a 70% capacity utilisation rate at its Manresa cement plant, producing 0.37Mt/yr.
"Capital to the tune of US$15m has been earmarked to eradicate bottlenecks and to boost volumes," said Lafarge Zimbabwe chief executive Amal Tantawi in an interview reported by the Herald newspaper. Lafarge has spent about US$5m on plant refurbishments over the past five years and it is now focusing on improving the cement production capacity of its existing plant.
Lafarge Zimbabwe is also in the process of conducting feasibility studies to establish a new manufacturing plant to complement the existing one. Tantawi added that Lafarge Zimbabwe was still keen on exporting cement despite a decline in export volumes in 2013. The company has been focusing on the local market since 2013 due to increased demand. Despite high demand for cement Tantawi highlighted liquidity issues with the local economy as the biggest challenge facing Lafarge. To tackle this Lafarge is rolling out different incentives to encourage its customers to make cash payments.
Lafarge Zimbabwe has also launched Supaset cement in the country following its use on other African states. The product is as a fast setting solution for the block making and precast segments of the construction industry.
Zimbabwe: Wang Yong, the managing director of the Sino-Zimbabwe Cement Company, has reported that the joint-venture is on track to complete a US$5m upgrade to the Gweru cement plant in the Midlands province. Once the work is completed the plant's clinker production capacity is expected to double to at least 0.2Mt/yr.
"We are now halfway through the upgrade... We have installed a modern bag filter system to cut emissions. No more thick dust or smoke from the chimney now," said Wang to the Chinese news agency Xinhua. He added that around US$1m was spent on improving pollution control and the rest is being used to refurbish cement mills, rotary kilns, build a cement warehouse and install new packaging lines. The Sino-Zimbabwe Cement Company wants to attract larger investment from China to fund further facility upgrade and expansion. Cement producers in Zimbabwe are set to benefit from increased infrastructure developments if the government's five-year economic plan is fully implemented.
The plant is a joint venture between the Industrial Development Corporation of Zimbabwe and China Building Material Industrial Corporation for Foreign Econo-Technical Cooperation with an initial investment of US$54m. The plant employs more than 400 workers, with 95% from Zimbabwe.
US$50m cement plant for Masvingo
28 January 2014Zimbabwe: Zimbabwe Zhongxin intends to build a cement plant in Masvingo at an estimated cost of US$50m. The company initially wanted to construct the plant in Chimanimani but had to relocate to Masvingo where 'substantial' limestone deposits were found.
Zhongxin Coking is the controlling shareholder in Zimbabwe Zhongxin with a 70% stake, while a local consortium, Qualisave Minerals Investments, owns a 30% stake. The project may commence during the first half of 2014 once the company has obtained all of the regulatory permits. The project has potential to create 400 jobs.
In terms of complying with the indigenisation and empowerment laws, an unnamed source stated that "the Chinese investors are bringing in capital close to US$49.5m and the contribution from the locals is quite insignificant for them to have a controlling interest. As such, negotiations are ongoing with the relevant authorities. The proposal is that the Chinese investors will gradually release some of the shares to the local partners in the coming years."
Zimbabwe's cement market is looking bright, with demand expected to increase thanks to various infrastructural projects on the cards, some of which are already underway. With an infrastructure backlog of US$14bn, the cement demand is expected to grow significantly in the medium to long term.
Zimbabwe: The Sino-Zimbabwe Cement Company has commenced its first phase of upgrading and refurbishing its Gweru factory. Work on the cement mill and rotary kiln is set to increase the clinker production capacity up to 0.2Mt/yr by the end of 2013. A second phase, also due for completion in 2013, will upgrade warehousing and storage facilities. Further upgrade work is planned for 2014.
"We are upgrading the capacity and efficiency of our cement mill so as to meet growing local and regional demand. The cement mill will be modernised with third generation technology that will immensely improve our efficiency and quality of product. This technology is also the first of its kind in Zimbabwe," said the company in a statement.
The Sino-Zimbabwe Cement Company is the product of a joint business venture between a Chinese foreign direct investment partner, China Building Material Industrial Corporation for Foreign Econo-Technical Co-operation (CBMC), and the Industrial Development Corporation of Zimbabwe Limited. CBMC contributed 65% of the original funding in the form of modern technology and expertise while IDC provided land, civil works, manpower and local knowledge. The cement plant has been in operation since 2001.
Zimbabwe: Lafarge Cement Zimbabwe has announced plans to invest US$200m within the next 10 years towards setting up a new cement manufacturing plant. Lafarge Managing Director Jonathan Shoniwa told local press at the company's launch event for Lafarge's 'Building Better Cities" branding campaign that Lafarge Zimbabwe would add 1Mt/yr of cement capacity to its current 0.45Mt/yr. He said the move would also increase its market share from its current level of 38%.
In 2013 Lafarge Zimbabwe is targeting a market share of 40% on account of its strong branding in the country and expects to continue to benefit from the continued growth in demand for cement. In 2012 local demand grew 10%. Growth of 5% is expected in 2013.
Like many other local manufacturing firms, cement producers are facing competition from imports. Recently, PG Industries indicated plans to import cement after seeing an opportunity in the market. "I think competition is always there and you can't shut it out completely," said Shoniwa. "You need to just play the game but we have a strong brand. Other players can import cement, but it takes time to build a brand. They can push volumes but it's not an overnight job to build a brand," Shoniwa said.
Shoniwa also took advantage of the Building Better Cities branding campaign to also announce plans for a multi-million US Dollar low-cost, high-density residential housing scheme. He said the cement producer would partner with banks, local authorities and other relevant players to see the project through.
"We are at the design stage. We are having discussions with possible partners and so far it's looking very positive," Shoniwa said, adding Lafarge's target was to bring the cost of constructing a standard high-density residential housing unit to US$10,000. When people talk of affordable housing, the thing that comes to mind is cheap. It does not necessarily have to be cheap in terms of quality so there is that innovation to say we should come up with new building materials that are
cost-effective."
Authorities are expected to provide land parcels while banks are expected to provide long-term and affordable funding for the scheme to enable beneficiaries to build houses at their own pace. Lafarge Zimbabwe is targeting a 29% increase in the top line in the current financial year after reporting revenue inflows of US$69.9m in the year to December 2012, an increase of 41% from 2011.
Shoniwa said that Lafarge Zimbabwe's full-year revenue is expected to rise to US$90m in 2013, with individual home builders expected to continue supporting the upward trend.
New Zimbabwe plant for PPC
11 February 2013Zimbabwe/Mozambique: South African cement manufacturer PPC's (Pretoria Portland Cement) Zimbabwean subsidiary, Portland Holdings Limited (PHL), is to build a new cement plant in the country to service its markets in Zimbabwe and Mozambique. The new plant will produce about 1Mt/yr of cement and will work alongside a separate grinding facility being constructed in Tete in Mozambique.
"In recent years our investment in Zimbabwe has show strong growth on the back of a more buoyant and stable economy," said PPC's chief executive officer, Ketso Gordhan. "This, together with the fact that PPC has received an indigenisation certificate, makes us optimistic about the future of the economy and the country as a whole."
"The construction of additional cement capacity will ensure that PPC continues to be a key player in the development of infrastructure in Zimbabwe and neighbouring countries," added Gordhan. "It is totally in line with our stated strategy of growing our non-South African revenue from the current 21% to at least 40% by 2016.
"Not only will this investment address the expected future increase in cement demand in Zimbabwe but create employment opportunities, beneficiation of the country's mineral reserves and a significant growth opportunity for our indigenisation partners," said PHL's managing director, Zak Limbada.
Where to build an African cement plant
28 November 2012The outgoing chief executive of PPC (Portland Pretoria Cement) officer, Paul Stuiver, summed up the dilemma facing cement producers on the east coast of Africa. Building near the coast leaves you vulnerable to imports.
In a recent interview with the South African business weekly, 'Financial Mail', Stuiver said that imports are not a threat to African expansion, provided that a facility is not built within 200km of a port. Exactly the same issue was raised by Yves De Moor in his column in the November 2012 issue of Global Cement Magazine.
Countries along Africa's east coast receive imports, but Stuiver said that Africa's high logistics costs mean the prices increase steeply as the cement is transported inland. He commented that the markets in Mozambique and KwaZulu Natal in South Africa were especially vulnerable and that most imports to South Africa come through Durban. Unsurprisingly both of PPC's big recent investments have been in landlocked countries, Zimbabwe and Ethiopia respectively. In July 2012 it also tried to invest in CINAT, the Democratic Republic of Congo's state-owned cement producer.
The import issue to South Africa reignited last week when the South African National Regulator for Compulsory Specifications (NRCS) confirmed that it had confiscated 'sub-standard' cement imported from Vietnam. As we covered in August 2012 in this column this follows a row in July 2012 about whether cement from Pakistan's Lucky Cement was complying with South African standards.
Although standards still lead the argument, more honesty has emerged with the use of the word 'dumping' in the complaints. Stuiver explained that "...the price of cement from Pakistan, India and Vietnam is low because electricity, fuel and transport rates are subsidised." Whilst PPC can report that its revenue has risen by 9% to US$837m for the first nine months of 2012, complaints against foreign imports seem overly protective. In 2009 PPC confirmed the existence of a cartel in the country. PPC has even gone to the Advertising Standards Authority to stop imports with elephants on their bags!
With reports that Nigerian producer Dangote is building a new US$389m plant in South Africa, thoughts turn to what will happen once South Africa becomes 'self-sufficient' in cement, like Nigeria which has proudly announced this recently. Giant infrastructure projects are one way to use all that excess cement and this is what Lafarge WAPCO has been asking the Nigerian government to do recently, in a road building drive. Better transport links in South Africa would wreck Stuiver's maxim about not building near a port.
Two solutions from this week's news might appeal to the industry on the south and east coasts of Africa. The first is to use inventive export barriers just like the Bureau of Indian Standards have imposed to slow down exports from Pakistan. The second is to persuade importers to do what a North Korean ship reportedly did with its consignment of cement this week off the coast of Somalia: dump it in the sea.
PPC plans US$200m plant in Zimbabwe
21 November 2012Zimbabwe: PPC (Pretoria Portland Cement) plans to spend at least US$200m on a new cement plant in Mashonaland Central Province in Zimbabwe, according to Zak Limbada, the managing director of its Zimbabwe subsidiary Portland Holdings Limited (PHL). The proposed plant will have a capacity of 1Mt/yr.
"We are busy drilling to identify the raw materials in the Rushinga area and some north eastern parts of the country," said Limbada.
PPC currently has a capacity of 1Mt/yr in Zimbabwe. Larfage and Sino Cement produce 400,000t/yr and 250,000t/yr respectively in the country. In November 2012 PPC announced that PHL has been awarded an indigenisation certificate by the government of Zimbabwe.
PPC to meet Zimbabwe ‘indigenisation’ requirements
19 November 2012Zimbabwe: South African cement producer PPC (Pretoria Portland Cement) has announced that its Zimbabwe subsidiary Portland Holdings Limited (PHL) has been awarded an indigenisation certificate by the government of Zimbabwe.
Zimbabwe's Indigenisation and Economic Empowerment Act requires that non-indigenous manufacturing companies operating in Zimbabwe must submit an empowerment plan, to satisfy a 51% indigenous Zimbabwean ownership requirement by October 2015. PHL had a pre-existing indigenous shareholding of 21.4%. It will sell an additional 29.6% to four indigenous parties in the country.
"We see the Zimbabwe market as an exciting growth opportunity and expect our operations to approach full capacity over the next two-three years. This opens up further investment opportunities for PPC in Zimbabwe," said PPC chief executive officer, Paul Stuiver.
PHL is the largest cement producer in Zimbabwe. Together the clinker manufacturing plant in Colleen Bawn and the milling depot in Bulawayo can produce over 1Mt/yr of cement. Zimbabwe has experienced a rapid increase in cement demand since 2009. National cement demand is currently estimated at more than 1Mt/yr.
Lafarge Zimbabwe raises revenue target
01 June 2012Zimbabwe: Increased cement demand in the local market has lead to Lafarge Cement Zimbabwe upgrading its revenue forecast for the year to 31 December 2012 to US$62m from an initial forecast of US$60m. At the company's annual general meeting managing director Jonathan Shoniwa said that increased capacity utilisation and cement demand had resulted in the revenue forecast adjustment.
In 2011 the company recorded a revenue of US$50m following a refurbishment exercise that increased capacity utilisation from 75% to 90% against a 19% decline in exports culminating from an increased focus on local demand. Shoniwa said that turnover in the four months to 30 April 2012 had risen by 35.2% to US$21.9m, with the operating margin having improved to 14% from 10% year-on-year.
Since Zimbabwe's economy 'dollarised' in January 2009, when US dollars were permitted to be used in parallel to the existing currency, cement demand for individual home projects increased as people focused on improving and building residential houses. According to Shoniwa, cement demand in the country is currently up by 28% predominantly due to retail construction. With the construction industry currently operating at below 40% capacity, the focus by the company will continue to be on the domestic market and increasing market share.
Lafarge Cement Zimbabwe has a capacity of 0.45Mt/yr. US$4.5m is expected to be spent on upgrades by the company in 2012.