S.African cement producer PPC takes over Cimerwa majority shares

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By Robert Mugabe

  • PPC plans $200M Cement Plant in Zimbabwe

Kigali-Rwanda-For 28years, Cimerwa has been only producer of cement in Rwanda, with production capacity of 100,000tons of cement every year, now after launching 600,000 tons of cement project every year, PPC has bought 51 percent of Cemerwa shares.

PPC, South Africa’s primary cement producer, has bought 51% of the Cimerwa cement company in Rwanda for a cash price of $69.4m. The acquisition is part of the group’s stated intention to make 50% of its revenue from the rest of Africa in future.

“This transaction is a further step in our commitment to invest in sub-Saharan Africa and we are very confident about Rwanda,” PPC CEO Paul Stuiver was quoted as saying.

“The Cimerwa plant is located in a challenging but very strategic region in East Africa, which currently lacks significant cement production capacity.”

Cimerwa, situated in southwestern Rwanda, has been the only cement producer in the country for 28 years. It has the capacity to make 100,000 tons of cement a year, and is undergoing a 600,000 tons a year expansion project that will be commissioned in 2014.

In addition to shareholder equity contributions, Cimerwa is in the process of finalising $104m of debt financing to complete the project.

PPC recently acquired 27% of Habesha Cement in Ethiopia. The stake was part of a joint 47% share in the Ethiopian company bought in partnership with South Africa’s Industrial Development Corporation. The partners are to help build a $130m state-of-the-art cement factory in that country.

South Africa’s cement markets have plunged since 2008, with producers making only about 11-million tons of cement a year, against installed capacity of about 16-million tons.

An industry newcomer, Nigerian-backed Sephaku Cement, is also about to add another 2.6-million tons of cement products a year to regional markets.

Annual cement demand in Rwanda is estimated at 350,000 tons. But based on Rwanda’s and the surrounding region’s positive economic outlook, regional cement demand is projected to rise to 1-million tons in the next decade.

“Combined with our recent investment in Ethiopia, the Cimerwa transaction will increase PPC’s revenue outside of South Africa to more than 30% by 2015-16,” Mr Stuiver said.

Cimerwa chairman Afrique Ramba said on Wednesday that he was “excited” about the relationship with PPC, and the potential of Cimerwa to play an even bigger role in the future development of Rwanda.

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