3 December 2008

Uganda: Hima Cement in $108 Million Expansion

Kampala — EXPANSION work of the Hima cement has started. $108 million has been secured for the construction of the new plant adjacent to the old one in Kasese.

The project, which was contracted to CBMI Construction Company, a pioneer in China's cement engineering industry, is funded by Lafarge, which specialises in building materials.

Site manager Bernhard Farnbauer said this was one of the biggest investments in Africa and the first of its kind in the region. Business Vision learnt that this was aimed at increasing production capacity to meet the local demand.

Speaking during a media tour of the expansion works, Hima Cement managing director David Njoroge said the sh209.5b new plant would increase capacity from the current 375,000 tons to over 830,000 tons of cement.

"This will increase Hima Cement's ability to meet the local demand which has been rapidly growing making Uganda a net importer of cement," Njoroge said.

He added that the investment, expected to be commissioned in 2010, would have a significant impact on the economy and socio-economic welfare of the people in Uganda.

"Our investment will contribute to economic and socio development of the country. The direct and indirect employment, our payment of central and local government taxes and our use of inputs," he said.

Njoroge stressed that Hima Cement is among the top tax payers in Uganda with an annual wage of bill of over sh4.2b.

Hima Cement Ltd was 15th among the top tax payers in the country with a total of sh24.9b in the 2005/2006 rankings.

Njoroge added that the company pays an annual electricity bill of sh6.6bn.

The UMEME corporate communication manager, Robert Kisubi said; Hima was among the five company's customers in paying electricity bills though he declined to reveal the bills adding that Hima was in the right position.

Njoroge said: "With the latest technology and complying with the Lafarge group environmental standards, the plant will be within the global environmental standards. We have been involved in environment conservation programmes in the area and we have planted over 500,000 trees in seven years and we intend to plant other 1million traditional trees by 2011."

The company has spent sh500m on community welfare programmes. It provides free anti-retroviral drugs to those infected and also gives voluntary counseling and testing to staff and the Hima community. The plant manager Allen Mate said, the company has unsteady power problem. "We had to buy a generator worth $1.8m as alternative power source and we are making an additional investment of $1.5m in a gas conditioning tower." Mate explained.This had led to an increase in production costs and hence the price of cement, he added.

Mate said they also have a man power powerwhere it is only limited to the local people who are not skilled. They have 259emplouyees and 300 contract workers.

He said the problem this had been improved through investing in staff development in relation to Lafarge system of continuous skills improvemement. The company has also carried out training to the locals and interns from various universities for further skill enhancement.

Mate said the current plant had come of age and could not meet all the standards in different aspects.

Hima took ownership of the plant in 1994 from Uganda Cement Industries in 1971. Lafarge through Bamburi acquired the plant in April 1999. $15m was injected since acquisition increasing production from 120,000 tons to 375,000 tons. However, Njoroge (MD) said, with the new plant, the company hopes to overcome most of the challenges to significantly increase production to meet both local and export demand.

He said the project is being funded by their sister companies and their savings. Hima is a subsidiary of Bamburi Cement which is part of Lafarge East Africa. Baburi Group is the leading producing and marketing Group in the Eastern Africa region.

Its subsidies include Hima Cement (Uganda), Bamburi Special Products and Lafarge Ecosystems. Bamburi Cement is a subsidiary Lafarge specialising in building materials with top rankings in all its business: Cement, Aggregates and Concrete and Gypsum. Lafarge is represented with in 76 countries and has 90,000 employees.

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