Displaying items by tag: Burkina Faso
HeidelbergCement has been reportedly showing interest in South Africa and Mozambique this week following the opening of new production capacity in West Africa. The Germany-based cement producer has beefed up its presence in the region with the inauguration of a 1.5Mt/yr clinker plant in in Togo and a 0.7Mt/yr grinding plant in neighbouring Burkina Faso. An additional 0.25Mt/yr grinding plant in the north of Togo is also planned for commissioning in late 2016. Other new projects in Africa include a new 0.8Mt/yr grinding plant in Tanzania that was commissioned in October 2014 and a new 0.8Mt/yr grinding mill at the Takoradi grinding plant in Ghana.
HeidelbergCement has repeatedly stated that it is considering production capacity expansions in other African countries. It currently operates in Ghana, Benin, Liberia, Tanzania, Sierra Leone, Togo, Burkina Faso and the Democratic Republic of Congo. Mostly it's a network of grinding plants with actual clinker producing plants in Tanzania, the Democratic Republic of Congo, Gabon and Togo. Its presence covers a band across central sub-Saharan Africa. Moving out of this zone into southern Africa would start to give HeidelbergCement a truly continental presence. However, from Dangote to PPC to Lafarge Africa other players are hard at work building their own cement empires.
The wild card here is how involved Chinese firms are in this process. Chinese companies like Jidong Development are building their own cement plants like the Mamba Cement plant in South Africa or Gweru in Zimbabwe, where upgrades are currently taking place. More commonly though Chinese companies like Sinoma are building new African cement plants such as a new PPC cement plant in the Democratic Republic of Congo or a new United Cement Company of Nigeria Limited (Unicem) cement line in Nigeria or several Dangote projects.
As part of the commissioning process for HeidelbergCement's new clinker plant in Togo, the Chengdu Design and Research Institute of Building Materials Industry (CDI, part of Sinoma) has emphasised that it will transfer the maintenance responsibility to local Togolese workers. The fact that the CDI's chairman made a point of saying this underlines tensions about both existing and changing international business influences in the region. Contrast this with the more sympathetic way in which Dangote's expansions in Africa that are portrayed by local media. Or look at this week's announcement by Egypt's ASEC Engineering and Management to help run a cement plant in Ethiopia. There is no need for calming statements from ASEC.
Finally, after all the discussion of the effect of oil prices on alternative fuels usage by cement producers it is worth noting what HeidelbergCement stated in its February 2015 trading statement. Principally, a drop in the price of oil is expected to present a positive impact on costs and market demand for the group. HeidelbergCement generates 86% of group earnings before interest, taxes, depreciation and amortisation (EBITDA) in net oil importing countries. In these places lower oil prices means potentially faster GDP growth and greater infrastructure spending. It is also worth considering the impact lower oil prices might have on the group's total oil and diesel bull of Euro250m/yr.
HeidelbergCement's full annual results for 2014 are due to be published on 19 March 2015. Maybe they will be more forthcoming about its intentions in Africa then.
HeidelbergCement inaugurates 0.7Mt/yr CimBurkina plant
09 March 2015Burkina Faso: HeidelbergCement has started production at its 0.7Mt/yr CimBurkina grinding plant in Kossodo, Burkina Faso. The plant will be supplied with clinker from HeidelbergCement's new 1.5Mt/yr plant in Tabligbo, Togo, which is currently under construction. The Cimburkina plant is a partnership with two local businesses.
HeidelbergCement's CimBurkina plant means that Burkina Faso now has three cement producers. India's Diamond Cement is the market leader with a 60% share while Morocco's CIMAF also has a considerable share. "Our goal is to capture 25% of the market and create a healthy competitive environment for balancing supply and demand," said CimBurkina's CEO Eric Goulignac.
HeidelbergCement is also considering entering South Africa and Mozambique to tap growing African demand.
Getting into Africa
13 March 2013If you have any spare cement this week – send it to Ghana!
First, HeidelbergCement announced plans for a new cement mill on the coast at Takoradi. Then, Dangote officially started to export cement to the west African nation.
HeidelbergCement's strategy in the region is telling because it is starting to head inland. The press release on Ghana indicated that the German-based cement producer intends to expand its capacity to 4.4Mt/yr by late 2014. This follows a recent announcement that HeidelbergCement are building their first grinding plant in Burkina Faso, directly north of Ghana. Previously the producer imported cement there. Now it intends to build a US$50m plant with a production capacity of 0.65Mt/yr.
Since most of HeidelbergCement's existing infrastructure in the region is based on the coast, building a plant in a landlocked nation - Burkina Faso - is a huge vote of investor confidence in west Africa. "In particular the countries of sub-Saharan Africa have a very high growth potential due to their early stage of industrialisation and rich natural resources," said Dr Bernd Scheifele, chairman of the managing board of HeidelbergCement in the statement accompanying the Ghana expansion.
The move also provides a clue as to how competitive the cement market is becoming in territories near the coast in Africa. Currently HeidelbergCement holds a mostly coastal presence in western Africa, in Benin, Democratic Republic of the Congo, Gabon, Ghana, Liberia, Sierra Leone and Togo. It has four cement plants and nine grinding plants. Its cement business made a year-on-year increase in revenue of 12% to Euro612m in 2012.
Roughly calculated, HeidelbergCement is paying US$77/t in Burkina Faso compared to US$38/t in Ghana to build its new production capacity. HeidelbergCement must be paying double for a reason.
Meanwhile, Dangote Cement announced on the same day (11 March 2013) that a fleet of cement trucks were heading to Ghana. Already the Nigerian cement producer holds a cement terminal with a bagging capacity of 1.5Mt/yr in the country. Dangote intends to start exporting 5000t/week of cement. Its eventual target is 5000t/day when the logistics are in place, or up to 1.8Mt/yr. Not a bad start in unloading Dangote's self-declared overcapacity of 20Mt/yr in Nigeria upon the neighbouring nations in the Economic Community of West African States (ECOWAS).
Burkina Faso: Germany's HeidelbergCement, together with local partners, is constructing a new US$50m cement grinding plant with a capacity of 0.65Mt/yr near the Burkina Faso capital city of Ouagadougou.
"The construction of the new cement grinding plant is part of our strategy of expanding our clinker and cement capacities in growth markets," said Dr Bernd Scheifele, Chairman of the group's managing board. "These include, in particular, the countries of sub-Saharan Africa. For many years, we have exported cement to Burkina Faso from our grinding plant in Togo. Our new plant will strengthen our position in the country as well as in the whole region."
In the future HeidelbergCement's grinding facilities in Burkina Faso and the neighbouring countries of Togo, Benin and Ghana, will also receive their clinker from the a clinker plant in Togo. This facility will be commissioned in early 2015.
It is expected that the grinding plant project will stimulate improvement in local infrastructure and housing. It is expected to create more than 100 jobs at the plant, with even more indirect jobs locally. The project is to be conducted within the framework of a joint venture between HeidelbergCement and local partners and will be commissioned in late 2014.
New plant for Burkina Faso
07 August 2012Burkina Faso: Burkina Faso is set to build a new cement factory, Cimburkina, the result of a partnership with HeidelbergCement. The new cement plant, with a production capacity of 0.65Mt/yr, will require an estimated investment of about US$47.2m.
The Cimburkina cement plant will be completed by December 2013, the culmination of a partnership between two domestic businessmen, Inoussa Kanazoe and Moussa Koanda and the German cement giant. It is expected that the plant will double its output to 1.3Mt/yr in 2014.