Displaying items by tag: Mali

Mali: Mahamoud Ould Mohamed, the Minister of Industry and Trade, has laid the foundation stone of the Mali Sahel cement plant in Bema, Bamako District. Sacko Holding is financing the project and it was previously reported as costing around US$300m, according to Mali Actu. The plant is expected to create around 600 direct jobs. It is scheduled to become operational in 2025. Sacko Holding and Energie du Mali (EDM), the state-owned electricity company, are also planning to provide an electricity supply to Bema as part of the initiative.

France: Despite a 12% year-on-year increase in consolidated sales to Euro1.75bn from Euro1.56bn, Vicat recorded a net income drop of 17% to Euro77.8m from Euro93.5m in the first half of 2022. The group attributed the decline to increased global energy costs and to non-recurring industrial costs in France, India and the US. These costs included investments in exceptional maintenance at its Montalieu cement plant in France and a debottlenecking capacity expansion at its Kalburgi, India, cement plant. Geopolitical events also impacted the profitability of the producer’s business in Mali. Group cement sales rose by 17% year-on-year to Euro1.1bn.

Chair and chief executive officer Guy Sidos said “The basis for comparison in the first six months of 2022 was unfavourably high given the sales and profitability levels achieved in the same period of the previous year.”

Mali: A foundation stone has been laid for the new Atlas 0.8Mt/yr cement plant in Dio-Gare. The project had an investment of around US$80m, according to Mali Actu. It is expected to be completed in mid-2025. The project is being financed by Papa Oumar Samake, the head of Atlas. The President of the National Transitional Council, the Prime Minister, the Minister of Territorial Administration and Decentralisation, the Minister of Industry and Trade, the Governor of the Koulikoro region and the local mayor attended the ceremony.

France: Vicat’s consolidated sales rose by 19.6% year-on-year to Euro1.56bn in the first half of 2021 from US$1.30bn in the same period in 2020. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 41% to Euro300m from Euro213m. Sales and earnings rose in all territories on an adjusted basis as markets recovered from a poor second quarter in 2020 due to the coronavirus pandemic, particularly in India and France.

“Focused on its carbon footprint reduction targets, the group has accelerated the commercialisation of its low-carbon product lines, adapted to the global climate challenge,” said Guy Sidos, the group’s chairman and chief executive officer. The company added that the upgrade of its Ragland cement plant in the US is on track for expected commissioning in the first half of 2022 and that it is ramping up a new mill in Mali.

Mali: Sacko Holding has completed a feasibility study at the site of its upcoming integrated cement plant in Bema, Bamako District. Mali Actu has reported that the plant will directly employ up to 300 people, increasing to up to 400 people after 2 – 3 years. Chief executive officer Ousmane Koné said that the plant would aim to meet local demand and export some cement. Construction is set to begin by the end of 2021.

France: Vicat recorded full-year consolidated sales of Euro2.81bn in 2020, up by 2% year-on-year from Euro2.74bn in 2019. Earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 6% to Euro557m from Euro526m. Consolidated net income rose by 8% to Euro172m from Euro160m.

The group said that organic sales were ‘strong,’ rising in all regions except in France, by 6% in total. It attributed the decline to a near-total shutdown due to the coronavirus outbreak in mid-March 2020, which lifted incrementally throughout the first half of the year. Vicat France’s cement business recovered ‘robustly’ in the second half of 2020, resulting in an operational sales increase of 3% for the year. Full stoppages of activity lasted for 33 days in India and for 30 days in Italy. Despite these challenges, business growth, cost-cutting and lower energy costs drove earnings growth, with ‘very sharp improvements’ recorded in the Americas and in Asia. Additionally, the ramp-up of a new grinding plant in Mali and production performance improvements in Senegal supported a ‘significant’ earnings increase in Africa.

Chair and chief executive officerGuy Sidos said, “Thanks to our employees’ tremendous efforts and commitment, the Vicat group strengthened its position amid the unprecedented current pandemic situation. Our resilience and flexibility allowed us to make organisational changes in order to reconcile our competing imperatives of keeping everyone safe and healthy, unlocking savings and making rapid adjustments, such as relocating our Paris head office to L’Isle d’Abeau in the Auvergne-Rhône-Alpes region. Likewise, we made improvements to Vicat’s governance and stepped up our environmental and digital transformation programmes. Given the strength of our cash generation, we were able to resume key productivity investment programmes for the future. Despite the adversity we faced, our teams across all our various regions successfully delivered higher production efficiency levels and met market demand cost-effectively, paving the way for a solid increase in the Vicat group’s results.”

In 2021, the group plans to expand cement production and invest in new cement terminals in India and to continue with the upgrade of its Ragland cement plant in the US. It also says that it will ramp up projects aimed at meeting its carbon footprint reduction targets. The group expects its earnings to rise at constant scope and exchange rates over the full year.

Mali: A strike by two hauliers unions based in Senegal has caused cement shortages. The Union des Routiers du Sénégal and the Intersyndicale du Secteur des Transports Routiers both started strike action in late December 2020, according to Bamako News. The country has three main cement plants - Ciments et Matériaux du Mali (CMM), Diamond Ciment (DCM-SA) and Ciments d'Afrique (CIMAF) – but these companies only have a production capacity of 2Mt/yr. This is estimated to be 50% of Mali’s national requirement of 4Mt/yr. Commentators have called for a national cement supply policy in response to the situation and to reduce reliance on imports.

Mali: Diamond Cement Mali (DCM) has signed a deal with La Société Malienne de Cartonnerie (SCS MDC) to procure 50kg bags to hold cement. DCM operates two plants in the country with a production capacity of 1Mt/yr, according to local press. It requires over 20 million bags per year. SCS MDC became operational locally in 2019. It runs a plant at Kamalé near Bamako. Moussa Silvain Diakité, the chief executive oficer (CEO) of SCS MDC described the contract as the company’s first ‘big’ deal.

Algeria: Algeria’s estimated value of exported cement in 2019 is US$60m, up by 200% from US$20m in 2018. Algerian Trade Minister Saïd Djellab noted increases to grinding capacity in Guinea Bissau, Senegal, Gabon and Mali as a potential source of revenue from clinker exports, according to L’Expression. “Algeria can meet the needs of these markets and become their leading supplier of clinker in 2020.” The minister estimated that the total value of cement and clinker exports ‘will reach US$400m by 2021.’

The news from Mali this week is that a new cement grinding plant is in the works. Ciments et Matériaux du Mali plans to build a 0.5Mt/yr plant near Bamako. Work on the US$34m project is set to start in October 2019 although there has been no word on the equipment supplier. The project is a long-standing one from France’s Vicat.

A new plant is probably very welcome following the last six months in the local market. Prices spiked by a third in May 2019, leading local producer Diamond Cement Mali to arrange a press conference to defend itself. Director Ibrahima Dibo explained that the company had fixed its prices in conjunction with the government at its units at Astro and Dio Gare since 2012. Instead, he blamed importers and traders for the situation, as well as low import rates from Senegal and Ivory Coast. The company proposed that it tackle the situation by importing more cement from one of its plants in Takoradi in Ghana and then transporting it into Mali via Dakar in Senegal. Although it noted that it would need permission from the government to do this.

The country has also been targeted by Nigeria’s Dangote Cement for several years. Back in 2016 the Nigerian cement producer was considering building a 1.5Mt/yr grinding plant. It also wanted to build a second production line at its Pout plant near Dakar in Senegal to export clinker specifically to Mali. It has since scaled back its expansion plans as the Nigerian economy entered a recession but in its 2018 annual report it noted that it had exported 0.43Mt of cement from Senegal and that most of this had gone to Mali, with plans to further increase exports in 2019.

At present Mali has three main grinding plants. Two are run by Diamond Cement and the third by Ciments de l'Afrique (CIMAF). An integrated plant at Guinbané, Diéma in the Kayes region was announced in late 2016 when the government signed a memorandum of understanding with Gaia Equity, a private equity company. This project was going to be built by China’s Sinoma.

Figure 1: Distribution of cement prices in Africa and Location of Plants 2015. Source: World Bank / ECDPM.

The status of that last project is unknown since there has been little news on it since. However, Figure 1 above shows why a private equity firm might sense opportunity. It’s out of date as various countries have become self-sufficient and we’ve covered this plenty of times before but the graphic from the World Bank really brings home the message that moving cement overland is uneconomical. This is mirrored by the mounting price of cement in Mali earlier this year. Africa has been described as the last great cement frontier and Mali is on the frontline.