Displaying items by tag: Senegal

Senegal: Sinoma subsidiaries Sinoma International Engineering and Sinoma Construction have signed a contract with Les Ciments Du Sahel for the upgrade of its 3.0Mt/yr Kirene cement plant in Dakar Region. The Euro245m contract stipulates that a new 6000t/day capacity cement production line will replace the plant’s old third line. Sinoma says that the new line will grind its first batch of cement from clinker in February 2022 and produce its own cement and clinker from October 2022. The group said, “We believe that the contract ought to present no significant challenge for the company.”

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%.

France: Vicat says that group business activity increased month-on-month between April and May 2020. In a special update on business in the context of the coronavirus, the company said that the outbreak’s impacts varied across the 12 countries in which it operates, all of which locked down due to the pandemic.

In France, the level of business is “slightly lower” than in May 2019 following a steady recovery from a “strong slowdown in mid-March 2020.” Macroeconomic and competition issues continue in Egypt and Turkey, not however due to the coronavirus outbreak, while volumes and prices have generally increased in Switzerland, the US, Brazil and Western Africa, except in Senegal, where the government has cancelled infrastructure projects. Following the pan-Indian lockdown between 24 March 2020 and 17 April 2020, business in India has resumed, albeit at a “level significantly below that of the same period of 2019.”

The group says that it is planning cost-cutting measures and has postponed a planned US price rise to late 2020.

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.

Nigeria: Dangote Cement’s sale revenue fell by 3% year-on-year to US$1.30bn in the first half of 2019 from US$1.34bn in the same period in 2018. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) dropped by 11.4% to US$605m from US$683m. Cement sales volumes decreased slightly to 12.3Mt. Revenue, earnings and sales volumes all fell in Nigeria but only earnings fell for its operations outside of the country.

“Group sales volumes were only slightly down on last year and this was a solid performance against the impact of delayed elections and increased competition from new capacity in Nigeria, as well as operational and economic challenges in key territories such as Ethiopia and South Africa. However, we saw a stronger performance from Tanzania, which is now running on gas turbines, and also from Senegal, where our sales volumes are more than 100% of our rated capacity,” said Joe Makoju, the group chief executive officer of Dangote Cement.

Senegal: Ousmane Mbaye, the Administrative and Financial Director of Dangote Cement Senegal, says that his company is not worried about potential plans by the government to cut tax exemptions to cement plants as part of its Plan for an Emerging Senegal (PES). He said that the company was ready to discuss the proposals with the authorities, according to the Le Quotidien newspaper. He also blamed distributors and a breakdown at the plant of a competitor for recent swings in the price of cement. Mbaye made the comments at a ceremony giving away tickets for a pilgrimage to Mecca and/or Rome.

Senegal: Falling export sales have reduced cement production. Exports dropped by 28% year-on-year to 0.14Mt in March 2019 from 0.2Mt in March 2018, according to the Agence de Presse Africaine. Cement production fell by 10% year-on-year to 0.59Mt in the first quarter of 2019 from 0.66Mt in the same period in 2018. Local sales remained stable in March 2019.

Senegal: The government plans to introduce a new tax on cement to support a house-building campaign. President Macky Sall said that the tariff would increase the cost of bags of cement, according to the Agence de Presse Sénégalaise. He added that the country has the cheapest cement in the region.

Senegal: The Ministry of Commerce says that a shortage of cement should be averted by the end of April 2019. A breakdown in the clinker production line at the SOCOCIM plant in Rufisque has led to reduced supplies, according to Senegal Direct. The subsidiary of France’s Vicat is arranging imports of clinker in the meantime.