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Update on Rwanda
Written by David Perilli, Global Cement
22 July 2020
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.
Sachin Chhabra appointed as Head of Brand Marketing at ACC
Written by Global Cement staff
22 July 2020
India: ACC has appointed Sachin Chhabra appointed as Head of Brand Marketing. Prior to this he was Head of Marketing and Digital Communications at Amway India Enterprises, the Indian subsidiary of the US company that sells health, beauty, and home care products. Chhabra was educated at the Institute of Management Technology, Ghaziabad and has also worked for Zenith and DLF.
Pakistan: Cement producers dispatched 47.8Mt of cement in the 2020 fiscal year, which ended on 30 June 2020, up by 2% year-on-year from 46.9Mt in the 2019 fiscal year. Data from the All Pakistan Cement Manufacturers Association shows that the largest area of growth was in cement exports from southern Pakistan, up by 46% to 5.88Mt from 4.01Mt, while northern exports fell by 22% to 1.97Mt from 2.53Mt. Conversely, domestic dispatches fell by 29% in the south to 5.64Mt from 7.98Mt, and rose by 6% in the north to 34.3Mt from 32.4Mt, thus constituting 72% of total dispatches.
Senegalese cement sales grow in first half of 2020 22 July 2020
Senegal: The Chambre des Mines du Sénégal (CMS) has reported a 5% year-on-year increase in domestic sales and a 0.6% year-on-year increase in cement production in the first half of 2020. The Le Journal de l'Economie Sénégalaise newspaper has reported that exports fell by 13%.
Democratic Republic of Congo: The Council of Ministers has approved a proposal of the Ministry of Industry to appoint auditors to perform an inventory and evaluation of the 0.3Mt/yr integrated Cimenterie Nationale (CINAT) Kimpese cement plant in Kinshasa Province with a view to re-launching cement production there. Current estimates place the cost of reopening the plant at US$82,000. CINAT is 92% state-owned.
The government established the Kimpese plant in 1974 and production ceased in 2011 due to a fuel shortage. It has resumed since. CINAT employees have kept the plant in working order and guarded it in order to prevent it from being salvaged for scrap.