Displaying items by tag: Mozambique

Mozambique: Limak Holding has started the construction of its 2Mt/yr cement plant in Maputo. The plant is scheduled to come into operation in the first quarter of 2016.

Serdar Bacaksız, a Limak Holding board member, said that the company has been closely monitoring the African market for a long time and might increase its investment by up to US$150m if needed. Underlining that Mozambique falls short of satisfying the rapidly-increasing demand for cement, Bacaksız said that the country offers major incentives to foreign investors, as it needs new investments in all fields.

Limak Holding is also set to lay the foundations of a cement plant on the Ivory Coast in November 2015 with an investment of US$55m. "We plan to open it in 2016," said Bacaksız, adding that the company will continue to seize different opportunities in the region. Limak Holding aims to achieve a turnover of US$3bn by the end of 2015.

Mozambique: Cimentos de Mocambique, part of Intercement, has concluded the installation of kiln filters at its cement plant in Matola, Maputo. The company invested US$10m in the equipment to reduce air pollution levels in the area.

Mozambique: Ambrian has announced that its Beira cement plant in Mozambique was completed this week, but that delays and cost overruns mean that the plant will cost an extra US$3m. The delays, which were due to issues with contractors, the availability of qualified staff and regulatory response times, increased the plant cost from US$42.5m to US$45.5m. Testing of the electricity substation will now start at the site and a timetable will be agreed to connect the substation to the main grid, which is expected to happen in early August 2015.

Mozambiqiue: According to Mozambique News Agency, the governor of Sofala, Helena Taipo, has ordered the limestone storage facility in Muanza be moved on environmental and health grounds.

Taipo took this measure after a message presented by local residents at a rally she addressed in Muanza, which complained at the way the limestone is currently stored. The residents said that the health problems allegedly caused by limestone dust are not new. Local people have long complained against the practice of Cimpor's Cimentos de Mocambique of storing large quantities of limestone next to Mwanza station, where it awaits transport by train to the cement plant in the nearby town of Dondo.

Taipo said that she did not really need to hear the complaint, since she could see the problem with her own eyes. "I have seen the houses covered with white dust," said Taipo. "Even here at the rally I've seen the dust, which shows that the situation is serious. We have to think seriously about the preservation of the environment. Cimpor must change the place where it keeps the limestone to somewhere else, because currently it is a danger to public health."

Participants at the rally called for the road from Dondo to Cheringoma, which passes through Muanza, to be paved. They also wanted the electricity grid to be further expanded. Taipo guaranteed that paving the road is one of the actions envisaged in the government's five year programme for 2015 - 2019.

The small cement industry of Mozambique, in south west Africa must be an interesting place to make cement. On one side the country's producers, like their more vocal South African counterparts, have been fighting off cheap imports from Iran, Pakistan, China et al. On the other side of the coin though, Mozambique has growing domestic demand and is within striking distance of growing markets further into Africa, like Malawi and the Democratic Republic of Congo (DRC).

With the announcement this week that there will be not one but two new integrated cement plants in the country, bringing over 2Mt/yr of new capacity, everything should be set fair for the coming years then, shouldn't it? Domestic production will rise, the price of local cement will fall as a result, competition from imports will drop off and money will be made from new exports.

Except that might not happen. Before the announcement of these two plants, (one of which does not state a capacity), there was around 5.5Mt/yr of grinding and integrated capacity either currently active in Mozambique or due to come onstream in 2015. With the new projects this rises to over 7.5Mt/yr.

The desirable chain of events described above starts to break down due to the fact that domestic demand in Mozambique, while rising, is not currently anywhere near as high as domestic supply. The United States Geological Survey estimated that the country produced just 1.2Mt/yr in 2012. Data for 2013 and 2014, though unavailable, is highly unlikely to show a three-fold increase. Indeed Insitec, a minority shareholder in Cimentos de Moçambique, predicted in 2014 that demand for that year would rise to just 1.5Mt, before hitting the dizzying heights of 1.8Mt in 2018 – And that's still three years away!

So what are the options? Option 1: Some or all of the planned and mooted cement plants will fail to come to fruition. Option 2: Some or all of the plants will be built but will operate at reduced capacity and/or on a campaign basis. Option 3: The Mozambican cement industry becomes a regional powerhouse and starts to export to its neighbours.

Option 1 is certainly possible. Limak Group, one of the parties linked to the new projects, is a Turkish cement producer that is inexperienced outside of Turkey. There has also been a lack of information on the progress of projects by Austral Cimentos ('coming on stream in 2015'), Star Cement and Consolidated Building Materials, although a lack of progress reports does not necessarily imply 'no progress.'

Option 2 is more likely, as some producers already operate on a campaign basis. InterCement's plant at Nacala, formerly an integrated plant, currently operates only as a grinding station. Option 3 is also possible, with Malawi particularly lacking in cement production facilities.
In reality a combination of all three 'Options' is the most likely outcome. However, this will lead to Mozambique becoming yet another player in an increasingly busy African cement market. The desire for self-sufficiency in cement production, a common goal for the region's governments, can easily lead to over-estimates of local demand growth, with resultant over-capacity. Of course the expectation that all African countries can get rid of this extra cement capacity via exports will ultimately backfire.

In southern Africa we already have South Africa exporting. Angola declared 'cement self-sufficiency' in October 2014 and banned imports at the start of 2015. Zambia, Botswana, Zimbabwe and DRC all have large-scale Dangote and/or PCC projects near completion or in production that will greatly reduce their need for imports. Meanwhile, further north, Nigeria is already a gigantic producer and significant cement exporter. Cameroon has recently banned imports and Ghana is thinking of doing the same. Over in the east of Africa, Ethiopia's (and the rest of that region's) rapidly-developing situation was covered in this column just two weeks ago.

Finally, in the north of Africa, Algeria has declared its intention to be self-sufficient in cement by 2016. This news must have 'gone down like a lead balloon' in Italy, Spain and Greece, which have been reliant on north African markets after the bottoms fell out of their own economies. In the north east, Egypt has different problems at present, also described previously. It needs fuel not cement!

So where does this all lead for regional cement dynamics in Africa? Well perhaps the situation in India points the way. There, as in Africa, local and regional producers with the desire to expand grew from their local bases and eventually overlapped. Against a backdrop of lower-than-expected demand, the country now has overcapacity. This has resulted in smaller producers being acquired and leaving the market.

Could this eventually happen in Africa? Only time will tell. However one thing is certain: It's just not possible for every country to export to every other country!

Mozambique: According to Agence de Presse Africaine, two new cement plants are planned for Mozambique in the coming years.

Turkey's Limak Holding plans to invest US$150m in a 2Mt/yr capacity cement plant in the Maputo Port area of Mozambique. Limak chairperson Nihat Ozdemir said that his company would create least 500 jobs during the first phase of the plant." Limak is also interested in entering the Mozambican energy sector and later intends to assess the viability of investment in ports, railways and tourism," said Ozdemir. Mozambique's Industry and Trade minister Max Tonela pledged the Mozambican government's support for Limak.

Meanwhile, Portugal's Cimpor Cimentos group, via its subsidiary Cimentos de Moçambique, has announced plans to build a new integrated cement plant in Nacala, Nampula for an estimated investment of around U$250m. It already owns an integrated cement plant in Matola and also operates four grinding units.

Zimbabwe: PPC Zimbabwe has secured US$18m for the construction of a new cement plant in Harare Province. The company said that construction of the new plant is currently its main priority.

"Preliminary work at the site is underway and fully-fledged construction is scheduled for August 2014," said PPC's managing director, Njombo Lekula. A road access network to the plant has already been completed and a temporary office is already set up at the site. Public hearings for the Environment Impact Assessment have been concluded, providing the green light for the project to commence.

PPC, which has 1.2Mt/yr of cement production capacity, intends to double its capacity by building a clinker plant in Mount Darwin District in Zimbabwe, as well as cement grinding plants in Harare Province, Zimbabwe and Tete Province, Mozambique. Lekula said that PPC is also looking at investing more in new technology to increase production capacity. According to Lekula, a feasibility study for the construction of a clinker plant and a cement grinding plant in Mashonaland Central Province, Zimbabwe is almost complete.

"We are conducting a feasibility study for the clinker plant in Mashonaland Central, but the plant in Harare is our main priority at the moment," said Lekula. He added that the construction of another clinker plant in Mashonaland Central would go in tandem with the limestone geological studies currently being carried out.

PPC, however, is worried by the performance of its export business. "Currently our plants in Zimbabwe are running at about 70% capacity utilisation and for us to get to decent levels of capacity utilisation, we have to find other markets," said Lekula. "We export to Zambia, Malawi and Mozambique and we continuously look for opportunities in the region." PPC's export business contributes about 20% to its total turnover, but the figure fluctuates. "Our export market margins are impacted by logistics. Sometimes the exports are not very stable hence the need to look at both the local and export markets to ensure sustainability," he added.

Zimbabwe: PPC Zimbabwe reports that its domestic sales for the first five months of 2014 have fallen by 5% compared to the same period in 2013. Managing director Njombo Lekula blamed the drop on a decrease in housing projects.

"For the past few years there has been significant growth in housing, which boosted cement demand, however, the current economic situation is beginning to have an impact on home building activities," said Lekula in comments reported by The Herald.

PPC Zimbabwe now intends to sell its excess production in neighbouring countries. However, Lekula pointed out that Mozambique has a 'very competitive' market due to imports from the Far East via the port of Beira. In addition the cost of logistics to reach this market is an issue for the cement producer. PPC Zimbabwe are also considering targeting Zambia but logistics and the fluctuating price of the Kwacha have posed challenges.

PPC Zimbabwe intends to start building a US$200m cement plant in the north-east of Zimbabwe in 2014. The company has also started constructing clinker grinding plants near Harare and Tete, Mozambique. Currently, PPC Zimbabwe has a cement production capacity of 0.76Mt/yr. The new projects are expected to increase capacity to 1.2Mt/yr.

Portugal: Cimpor intends to increase its cement production capacity in Mozambique to 2.4Mt/yr after a new grinding unit is put on stream, the company has said in a statement.

The new unit at the plant in Dondo, in southern Mozambique, has a production capacity of 60t/hr. The unit will double the Dondo plant capacity and will add almost 0.5Mt/yr to Cimpor's overall cement output in the country. Tests at the new grinding unit began on 27 August 2013. Works for optimisation of the capacity and reduction of electricity consumption will be carried out in October 2013.

In July 2013 Cimpor signed a contract to rent a cement grinding plant close to its Matola cement plant.

Mozambique: Cimentos Mozambique has signed a contract for the manufacture and installation of a filter to reduce the emissions from its cement plant in the southern city of Matola. The US$8m order has been placed with American Air Filter for installation in 2014.

"Protecting the environment and the health and well-being of the residents of Matola and the surrounding area was one of the first points on the agenda of the new management of the factory. We are convinced that we will be in a much better situation when the new filter is installed next year," said Cimentos Mozambique spokesman Sergio Bandeira.

Cimentos Mozambique is Mozambique's largest cement producer. In late 2012 Brazilan cement producer InterCement took over the company from Cimpor.