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Sub-Saharan Selection: Mozambique, Tanzania and Democratic Republic of Congo

World Cement,


Read part 1 here.

Mozambique

This country is considered to be one of the strongest markets for growth in the region. BMI reports that the construction sector will average 6.7% growth per annum from 2014 – 2023, driven by investment in infrastructure. However, investment in mining and natural gas exploration, which will drive freight transport and power projects, could see the construction industry grow by 9.1% this year.

Mozambique is scheduled to become an oil producing country, and significant progress is expected to be made in natural gas and coal production, according to the Economist Intelligence Unit. The South African petrochemical company Sasoi will launch oil production this year, initially producing 2000 barrels per day. At the same time Sasoi is increasing production in its gas fields in Pande and Temane. The country has extensive onshore and offshore sedimentary basins containing natural gas, most of which has to be explored, as well as significant coal reserves, which are considered to be the biggest in the world.

Regular readers of World Cement will have seen our news report in a recent issue on the Provincial Directorate for Trade and Industry’s invitation to potential investors from the UAE to pump more money into the province. This follows an earlier investment of US$18 million for a new mill and bagging equipment plant for Cimentos de Mozambique’s Dondo plant. As announced last year, the company placed an US$8 million order with AAF for the manufacture and installation of a filter to reduce emissions at the same plant.

Other ongoing projects include Star Cement’s 450 000 tpa facilities, Cimentos de Beira’s new 550 000 tpa clinker grinding and cement packing plant in the Port of Beira, and China-Mozambique Cement & Mining’s 1 million tpa plant in the Cheringoma district.

Tanzania

While it is accepted that Tanzania is one of the world’s poorest economies in terms of per capita income, it has achieved high overall growth rates based on gold production and tourism. This is confirmed by Ventures Africa, which reports that the country has enjoyed strong growth over the past decade, increasing at nearly 7% between 2004 and 2013. No less a body than the IMF estimates that the country’s economy could grow 7% annually for the next few years, while pwcGlobal suggests it will become one of the fastest in the world. In addition to gold, the country is home to other minerals, including diamonds and coal. That said, Tanzania faces massive infrastructural challenges across all sectors and it requires an estimated US$6 – US$8 billion to keep up with expected infrastructure needs through to 2020. At the time of writing, transport and utilities infrastructure projects worth US$19 billion were in the pipeline.

The response by the country’s cement industry to the increase in infrastructure investment has been significant. Local press reports indicate that the Dangote Group’s 3 million tpa cement plant, now under construction in the Mtwara Region, is scheduled for completion in 2015. Aliko Dangote has said that it will be the largest cement plant in East and Central Africa. Construction of Tanga Cement’s no. 2 clinker line is well in hand, with two Loesche vertical roller mills (one for grinding raw material and one for grinding coal) currently being installed. On completion, the total capacity of Tanga Cement’s facilities will be 3.5 million tpa. Completion of Tanzania Portland Cement Company’s new 700 000 tpa cement mill, clinker silo and cement silo is scheduled for later this year. The company is a subsidiary of HeidelbergCement. Mbeya Cement, a subsidiary of Lafarge Tanzania, is currently upgrading its production line to increase overall capacity to 700 000 tpa. This is due for completion next year.

Democratic Republic of Congo

The chapter on the Democratic Republic of Congo (DRC), written by Séraphine Wakana and Ernest Bamou in the report, African Economic Outlook, tells us that GDP grew by 8.1% in 2013 driven by the extractive industries (mining of copper, cobalt and gold), wholesale and retail trade, construction and agriculture. Construction remains one of the pillars of growth and, of course, impacts on other sectors. The continuing strong performance of the mining sector has been helped by investment demand, macroeconomic stability and road construction. However, despite its natural resources, the country remains one of the poorest in the world and the major challenge it faces is to ensure the economy contributes to human development. Much will also depend on whether the country’s security system can cope with a resurgence of conflict in the east of the country.

As with any country in Sub-Saharan Africa, investment is essential and foreign investment vital. When it comes to investment in the cement industry, one needs look no further than that provided by the Dangote Group. Local press reports in February of this year published the announcement between Aliko Dangote and the president of DRC, Denis Sassou Nguesso, regarding Dangote’s plan to build a 1.5 million tpa plant. The plant should be onstream in April 2016. The investment follows the group’s first move into the DRC with the construction of the 1.5 million tpa plant in Madingou, which is due to be completed this year. A joint venture between South Africa’s PPC and DRC’s Barnet Group was agreed last year, which will see the construction of a US$230 million, 1 million tpa plant. Pakistan’s largest cement producer, Lucky Cement has entered the DRC through a 50/50 JV with the Rawji Group. The JV, which is known as Nyumba Ya Akiba (NYA), is building a 1.18 million tpa plant some 250 km from Kinshasa. When all three plants become fully operational in 2016, DRC’s local cement production will increase from 0.5 million tpa to almost 4.2 million tpa.

Read part three here.


Written by Paul Maxwell-Cook. This is an abridged version of the full article, which appeared in the September 2014 issue of World Cement. Subscribers can view the full article by logging in.

Sources: see Part 1.

Read the article online at: https://www.worldcement.com/africa-middle-east/08092014/sub-saharan-selection-403/


 

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