
Displaying items by tag: Mozambique
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.
Mozambique investigate ‘dramatic’ rise in the price of cement
17 October 2012Mozambique: The Mozambican government's National Economic Activities Inspectorate (INAE) is investigating cement wholesalers and retailers in the northern province of Nampula, after recent dramatic increases in the price of cement. The move is attempting to halt the hoarding of cement and its subsequent resale at speculative prices on the informal market.
The investigation is examining why a 50kg sack of cement produced at a plant in Nacala is being resold at a 66% mark-up in the provincial capital of Nampula city. A government decree from November 2011 fixed the maximum profit margin at 12% for wholesalers and 25% for retailers.
However, wholesalers and retailers in Nampula have claimed that the prices cited by the INAE are unrealistic because of the high transport costs involved in moving cement from Nacala to Nampula. According to the wholesalers and retailers, waiting times in Nacala also contribute to the cost. Trucks sometimes wait outside the cement factory for seven days before they are loaded, suggesting that the plant in Nacala is unable to cope with the demand.
Nacala has two cement plants but only one supplies the market. The other sells its cement directly to the contractors building major public works in the Nampula province.
Mozambique production hits record high
06 June 2012Mozambique: Domestic production in Mozambique reached a record high of 0.28Mt in the first quarter of 2012, with imports falling to 79,000t during the same period.
National Director of Industry, Sidonio dos Santos, has attributed this growth to a sharp increase in the availability of cement, although domestic production is yet to meet the demands of the market. Cimento Nacional, a new cement factory, has been commissioned with an installed annual capacity of 0.25Mt/yr. Cimentos de Mocambique, the largest cement factory in the country, has increased its capacity to 0.40Mt/yr with the inauguration of a new mill.
In 2010 total production capacity for the country was estimated at 1.3Mt, which increased to 2Mt in 2011. In January 2012 domestic production reached 79,000t while imports were just 16,000t. In February 2012 production was nearly 90,000t, with imports at 26,000t. In March 2012 production was 0.11Mt, with imports at 37,000t.
"We believe we will meet the government's five-year plan for cement production, because investors are implementing their projects to increase production and build new factories," said Dos Santos.
Currently there are five cement factories in Mozambique. The government expects to inaugurate another three cement factories in the province of Maputo: GS Cimentos, with a capacity of 0.5Mt/yr; ADIL Cement, with a capacity of 0.12Mt/yr; Maputo Cement and Steel Maputo with a capacity of 0.13Mt/yr. In January 2012 Industry and Trade Minister Armando Inroga announced that the government is considering imposing a quota system for imported cement later in 2012 in order to protect Mozambican cement producers.
Ultratech interested in limestone mine in Mozambique
25 April 2012Mozambique: Indian firm Ultratech Cement is negotiating the purchase of a limestone mine in southern Mozambique for about US$286m. According to media reports, negotiations between the Mumbai conglomerate and the mine's owner began in February 2012 and the deal may result in the construction of a cement factory in Mozambique, a country where the demand for construction materials has been growing at an annual rate of 8 - 9%/yr.
The mine is located in the Magude region of southern Mozambique near the capital Maputo and has estimated reserves of 700 – 800Mt of high quality limestone.
In April 2010, UltraTech Cement acquired the ETA Star Cement company, a Dubai producer with capacity of 2.3Mt/yr US$324m, opening access to markets in the United Arab Emirates, Bahrain and Bangladesh.
500,000t/yr plant planned for Mozambique
04 October 2011Mozambique: A new cement plant in the southern province of Maputo is scheduled to start construction in June 2012. Budgeted at USD78m, the project is being developed by the Chinese company Africa Great Wall Cement Manufacturer, according to the country's provincial director of Trade and Industry, Fanieta Manjate.
The factory will be built in Chichuo, near Magude, covering an area of 80 hectares. The plant will have the capacity to produce up to
500,000t/yr when it starts operating at the end of 2012 or early 2013. Initially the construction work had been scheduled to start in June 2011.
Manjate stated that the company is currently mobilising equipment and building houses to accommodate the staff who will be involved in developing the project. The Environmental Impact Study has already been approved and families living in the area are being relocated to make way for the development of the project.
The Magude plant becomes the third cement factory set up by Chinese investors in Mozambique. The first in Salamanga, Maputo province, is currently under construction at a cost of USD72m with an expected production capacity of 800,000t/yr. The second in Boane, GS Cement, has an investment of USD100m and it will have the capacity to produce 550,000t/yr. Along with domestic upgrade projects the country's cement production could jump from the current level of 1.3Mt/yr to reach 4Mt/yr by 2013.