Global snapshots: Africa
The operating margins of major cement players in Egypt were impacted by political instability and the withdrawal of energy subsidies throughout 2012. In April of this year, the Ministry of Petroleum dealt another blow to the industry when it announced a reduction in the supply of natural gas to cement plants starting from June to September. Inevitably, this will lead to increases in cement costs. With a population of over 80 million, there is a growing demand for cement; it has been suggested that there will be a 3.5% growth in consumption in 2013.
Market research reports seem to agree that there will be real growth for the construction industry in Morocco, at 7% y/y this year, and 7.4% pa between 2013 and 2020. New capacities in recent years have created much competition among the cement players.
At the end of 2012, Manfred Asamer, Executive Board spokesman for Asamer Holding, said that the family company had been able to gain full control over its operations in Libya. The company’s three major plants had been out of action for 18 months following the civil war, but were expected to re-establish pre-war levels this year. In February, the Libya Herald reported that a Saudi businessman had been in preliminary talks to invest US$67 million in setting up a cement plant in Misrata. Watch this space for further news.
The construction of new plants to meet the strong demand for cement and reduce imports is a major objective of the government in Algeria. This was outlined recently in BEDigest.com. The country’s current production of 18 million tpa is insufficient to meet demand generated by the construction of 200 000 houses pa (from 2010 to 2014), together with infrastructure needs in other sectors such as highways, railways, ports and airports. Capacity expansions of a number of existing plants are planned, as well as the construction of new plants in Bechar, Relizane, Djelfa and Oum El Bouaghi.
At a recent customers forum, the management of Lafarge WAPCO Nigeria plc said that Nigeria has the potential to become a huge cement market in the world. The country currently produces 20 million tpa, but it was suggested that capacity could eventually rise to 50 million t. The Dangote Group has been dominant in expanding the cement market not only in Nigeria, but in many other African countries, including Senegal, Ghana and the Republic of Congo. However, it is interesting to see that another Nigerian multi-millionaire, Abdulsamad Rabiu, Chairman of the BUA Group, is constructing a 3 million tpa plant in Edo State in the south of Nigeria. In Tanzania, HeidelbergCement is investing US$31 million to build a fifth plant by 2014, to boost capacity to 2 million tpa. There is intensive competition in a market where demand grew by 10% last year on the back of a construction boom. In fact, HeidelbergCement is carrying out projects totalling US$400 million in sub-Saharan Africa. It is currently installing a new cement mill and cement silo at Takoradi in Ghana. Western Diamond Cement has been granted a loan by Stanbic Bank Ghana of US$20.2 million to build a 1 million tpa plant in Egyam Bokro, near Takoradi.
In February of this year, G Power Cement announced plans to invest some US$90 million to build an 800 000 tpa plant in Cameroon. The German company has joined forces with the Dangote Group and Moroccan house builder Addoha group in supplying the country and the Central African region’s booming construction sector.
It is perhaps a reflection of the state of the cement industry in South Africa that the Cement & Concrete Institute has closed down its operations after 75 years of service to the industry. Lack of funding from its members has made it impossible for the Institute to continue. After three years of falling volumes, the industry began to recover last year. Volumes are expected to increase by 4 – 5% this year. The country’s largest cement producer, PPC, is reported to be planning a new US$200 million plant in the Democratic Republic of Congo (a net importer of cement). In addition, PPC will have two other new plants operating in Rwanda and Ethiopia by the end of 2015.
Written by Paul Maxwell-Cook. This is an abridged version of the full article, which appeared in the July 2013 issue of World Cement. Subscribers can view the full article by logging in.
Read the article online at: https://www.worldcement.com/africa-middle-east/25062013/global_snapshots_africa_cement_industry_12/
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