Displaying items by tag: Zimbabwe

Zimbabwe/Africa: Aliko Dangote, President of Nigeria's Dangote Cement, has announced plans to open a US$400m cement plant in Zimbabwe. He also announced plans to invest in coal mining and power generation in the country.

"We've already decided to invest into Zimbabwe. That's why we are here," said Dangote following meetings with Zimbabwe's President Robert Mugabe and Vice President Emmerson Mnangagwa. "Any country we visit means, 'Yes, we've decided to invest,'" Dangote told journalists in Harare.

Construction is due to start in the first quarter of 2016, following the granting of government permission. Once constructed, the plant will produce 1.5Mt/yr of cement.

More widely, Dangote has also stated that investments in new plants across Africa are expected to increase the company's cement capacity to 100Mt/yr by 2020. Dangote said that Africa needs to increase its per capita consumption of cement in order to aid infrastructural development, stimulate further demand and force down rising cost of the commodity.

Zimbabwe: PPC is on track to commission its second cement plant in Zimbabwe in the second half of 2016. It is building its new 700,000t/yr plant at Msasa near Harare at a cost of US$80m. The plant is being built by China's Sinoma International Engineering.

PPC aims to generate 40% of its total revenue from outside South Africa by 2017, compared with about 28% now. Including its second Zimbabwe plant, PPC has four cement manufacturing plant projects in Africa. The other projects are in Rwanda, the Democratic Republic of Congo and Ethiopia.

Njombo Lekula, the managing director of PPC, said that the investment PPC was making in the Msasa plant was a vote of confidence in Zimbabwe's future and an expression of its commitment to build, grow and contribute meaningfully to the national economy while delivering on local imperative. "PPC Zimbabwe is looking to the future of the country, with today's event providing a promise of things to come. While our existing plant in Bulawayo has positioned us well in Matabeleland, it's clear that much of our country's future growth centres around Harare and northern Zimbabwe," said Lekula.

PPC is engaging with numerous local suppliers to leverage the scope of opportunities on this project beyond the main engineering, procurement and construction management (EPCM) agreement. "Because almost 70% of the total value of the EPCM is allocated to the supply of actual plant equipment, it was necessary for us to contract with a provider of the likes of Sinoma to ensure we create a world class plant in and for the region. Sinoma has contracted local labour as part of its workforce on the project, as well as meeting our non negotiable local supply requirements," said Lekula. He added that local contractors, including JR Goddard Construction, Ascon-Tencraft and HVC, had already worked on the project.

"As Zimbabwe's largest producer of ordinary Portland cement and the only producer of 42.5 cement, we are ideally positioned to play a leading role in developing the country's infrastructure. We have the equipment, processes and tanker fleet in place and are thus able to handle the bulk deliveries that are vital to these big projects. As such, we see ourselves as providing not just cement but a total solution to our customers," said Lekula.

Zimbabwe: PPC is under fire from local construction companies that have accused it of sidelining them in the construction of a new cement plant in Ruwa in favour of foreign companies, as reported by All Africa.

According to 'inside sources,' local companies submitted bids, but these were rejected due to a directive from the cement company's head office to sideline local companies and renegotiate a new contract with the main contractor, China's Sinoma International Engineering. The Chinese company was already undertaking construction works at the cement plant. Sources have said that since the beginning of construction, no projects have been awarded to local firms, which claim to have the same technical ability and expertise as the foreign companies.

"PPC is constructing a cement plant in Ruwa and is using only Chinese contractors to build the plant at the expense of local construction companies with the same capacity. Local companies submitted bids and none of them got a contract," said one unnamed source.

Another source said that a Chinese workforce drove the whole construction project being executed by Sinoma, which was against the Zimbabwe Agenda for Sustainable Socio- Economic Transformation Agenda's goal of creating jobs. "A number of local indigenous companies have tendered for various technical expertise, but none of them have been recognised. We believe that in order to empower local companies, there should be joint ventures between the foreign companies and locals to get a win-win scenario," said the source.

PPC managing director Njombo Lekula said that the company had engaged Sinoma on an engineering, procurement and construction management (EPCM) arrangement. He said that the EPCM was a common form of contracting arrangement for very large projects within the infrastructure, mining, resources and energy industries. "We engaged the Chinese in an EPCM arrangement and the contractor is the one that knows how to execute the project. Right now, Sinoma employs 60 locals, which I think is a large number. Due to the arrangement it is obvious that the contractor will provide for all the materials required, but we told them that we need a quarter of local supply as well. The claims are baseless considering that we contracted also JR Goddard construction to do our road and sewer reticulation works for US$700,000. So to say we are sidelining locals is unfounded," said Lekula. He added that the company would continue to empower local companies and suppliers. For example, an indigenous company has been awarded a contract to do all of the rail infrastructure at the plant at a contract value of about US$3m.

PPC expects to complete the construction of its 1Mt/yr capacity cement plant in the first half of 2016 with an investment of about US$86m having been made towards the project so far. The project would cost a total of US$200m after completion, with the investment package set to aid the setting up of another plant in Mashonaland Central. PPC is also building a separate grinding facility in Mozambique's Tete Province.

Zimbabwe: Lafarge Cement Zimbabwe, which recently merged with Holcim, is considering retaining its Lafarge brand in the country, according to All Africa.

A Lafarge spokesperson could not clearly indicate how the merger would affect the local brand, but suggested that Zimbabwe could remain with the Lafarge brand with a LafargeHolcim endorsement, in comment with the Financial Gazette's Companies and Markets,

"There will be three different approaches to the branding of the new countries. In countries with a balanced overlap, including cement operations in Bangladesh, Brazil, Morocco, Russia, Spain and the US, as well as for the trading business of the new group, LafargeHolcim will be introduced as the corporate brand, while existing Holcim and Lafarge brands on the market will remain and be complemented by the endorsement, 'a member of LafargeHolcim'," said the spokesperson. "In other countries with overlap of activities including France, Indonesia, Malaysia and the Philippines, either Lafarge or Holcim will become a corporate brand receiving the endorsement. In the countries without overlap, the existing brand will remain at all levels, also with the group endorsement." Zimbabwe has no overlap as Holcim did not have a presence in the country.

Zimbabwe: According to Southern Eye, PPC Zimbabwe's cement exports in the first half of its 2015 fiscal year, which ended on 31 March 2015, took a knock due to the weakening of the South African Rand against the US Dollar.

PPC said that exports from its Zimbabwe operations accounted for only 10% of cement sales volumes, although local sales were encouraging. It said that cement volumes in Zimbabwe grew by 9% in the first half of its 2015 fiscal year due to new marketing strategies implemented during the period.

PPC Zimbabwe's managing director Njombo Lekula confirmed that exports had fallen. "In terms of business, we are doing fairly very well, but there has been a bit of a slowdown from last year. However, performance internally in the country is still very good and that is something we can be happy with," said Lekula. "Obviously, on exports it wasn't great, partly because of the strengthening of the US Dollar and capacity in other surrounding areas. To export has been a bit difficult this year. Looking forward, we think the second half of the year will be very good as usual. We normally do very well in the last three months of our financial year, which ends in September 2015. I'm quite happy with the PPC Zimbabwe performance at this point in time."

PPC Zimbabwe is constructing a US$75m, 680,000t/yr capacity cement plant in Harare. The plant is expected to start production in the middle of 2016. The group recently unveiled an adjustment to its brand name for Zimbabwe and is now trading as PPC Zimbabwe.

Zimbabwe: Over 600 families in Masvingo are set to be displaced to make room for a new cement plant. The displacement follows the discovery of rich limestone deposits in the area and about 16 villages will be affected. Initially, 200 villagers are expected to be employed at the plant.

Masvingo Rural District Council CEO Martin Mubviro said that they had signed a Memorandum of Understanding with a company that wanted to invest in the venture, Xhing Xhong Cement Company. "I can confirm that we've agreed with an investor who wants to establish a cement plant. We have signed a Memorandum of Understanding with the investor and it is now left to them to start the project. Close to 600 families may be affected, although the exact number of those to be moved will be ascertained after feasibility studies are complete. The land where they should be resettled is yet to be identified," said Mubviro.

He said that major infrastructural improvements around Masvingo would be made once operations begin. "While some villagers will feel aggrieved to be moved from their original homes, there is a bigger picture of employment as many unemployed youths are going to get jobs," said Mubviro. "The plant will also add value to the province's economy through infrastructural development. People in this province will also get their cement for building nearer, so too will businesspeople who deal in building materials. Thus it will have an effect on prices of cement."

Zimbabwe: Sino Zimbabwe Cement Company is now operating at 60% capacity utilisation following a US$4m investment in a three-phase plant upgrade.

Phase one upgrades were undertaken on the cement mill and rotary kiln in order to boost cement output. The completion of the kiln upgrade has seen Sino Zimbabwe Cement improve its energy consumption and reduce its carbon footprint, while the new high-temperature bag filter system will significantly reduce dust emissions. The second phase of upgrades will target the warehousing and storage facilities and are expected to be completed in 2015. The third phase will be completed in 2016.

"The completion of the first phase boosted clinker production at the Gweru plant. Now we can produce 700,000t/yr," said Industrial Development Corporation of Zimbabwe (IDCZ) public relations advisor Dereck Sibanda. "The amount invested went towards refurbishments of the cement mill, the rotary kiln as well as renewing and automating ancillary equipment."

Sibanda said that cement demand is at its peak and that Sino Zimbabwe Cement will continue its upgrades to improve viability. "The second phase is expected to be complete sometime this year and we are quite confident of our prospects considering the richness of our limestone deposits," said Sibanda.

Sino-Zim is a joint venture company between IDCZ and China Buildings Materials Corporation, which started operating in 2001. The US$4m investment by the Chinese shareholder was to boost output and reduce pollution. Sibanda said that the new technology would help Sino Zimbabwe Cement to reduce its emissions. In 2013, it was fined by the Environmental Management Agency for air pollution.

Zimbabwe: PPC Zimbabwe intends to invest US$75m in 2015 on its Harare cement mill to develop its export market. The mill will be commissioned in the first quarter of 2016 according to PPC Zimbabwe managing director Njombo Lekula. The cement producer is also spending US$6.4m on production upgrades at its Bulawayo and Colleen Bawn cement plants.

Lekula told local press that PPC Zimbabwe's export market had been cut by 40% due to the strengthening of the US dollar. However, he expected the export market to improve in the remainder of 2015.

Zimbabwe: Plans to build a cement plant in Zvishavane by Chinese investors have been challenged as it has emerged that the mining rights in the area belong to Shabanie Mashaba Mines (SMM). This may delay the project as SMM is still the subject of an ownership dispute between the government and South African-based businessman Mutumwa Mawere.

The project was intended to be built 30km from the Zvishavane along the Zvishavane-Mbalabala road, according to local press. It was part of the deals made with China after President Robert Mugabe's visit to China in 2014 as well as negotiations between the Joint Zimbabwe-China Permanent Commission.

Zimbabwe: Lafarge Cement Zimbabwe is going ahead with plans to upgrade its plant to increase capacity from 390,000t/yr to 450,000t/yr. The upgrade will cost US$15 – 20m, according to Lafarge Cement Zimbabwe CEO Amal Tantawi.

"Lafarge has a nominal capacity. We could produce up to 450,000t, but we do have some challenges that we are working on. Beyond that, we want to stabilise and be able to reach our maximum capacity, but that will not come before 2016," said Tantawi. "The challenges that we are facing are the cement mills that cannot reach this capacity, but we are looking at installing new mills by 2016. Once we do the upgrade, we will be able to operate at maximum capacity of 450,000t."

Lafarge Cement Zimbabwe is in a closed period and is due to release its financial results for 2014 by March 2015. Tantawi said that the year has not been a good one. Group revenue for the half year that ended in June 2014 declined by 12.5% to US$28.2m, while gross profit was US$9.4m, compared to US$14.1m in the same period of 2013.

"Traditionally, the second half of the year has always been better in terms of business growth and the trend is expected to continue in 2015. Going forward, the construction industry has positive growth prospects premised on the mounting housing backlog and the pressing need for overall infrastructural rehabilitation and development. The company is well positioned to take advantage of the expected growth in the construction sector," said Lafarge Cement Zimbabwe in a statement.