CIMERWA, Rwanda's largest cement manufacturing company has signed Rwf 9bn deal that will see it receive peat supplies for the next five years.
Maria Legodi Busisiwe, chief executive officer of the firm said the deal, signed yesterday with Peat Energy Company (PEC); a subsidiary of Rwanda Investment Group (RIG) will see them reduce greatly on the energy expenses it incurs as they have been relying on heavy fuel which is expensive.
"Peat is used to some extent to complement the Heavy Fuel Oil (HFO) whose prices keep fluctuating and the former has proved to be a much cheaper alternative solution," said Pierre Kalinganire, chief executive officer of PEC.
HFO and Peat are used to burn clinker, the second last material to produce cement.
CIMERWA has been collecting peat on a daily basis from the Gishoma site in Rusizi District in the Western Province.
Busisiwe noted that CIMERWA's demand had been increasing every year which prompted them to sign the supply deal.
"We are on the brink of completing a cement production factory and looked forward to secure one of its most important resources it uses," she said.
She said the plant, that will be capable of producing 600,000 tonnes of cement per year is scheduled to be commissioned in February next year.
Currently, the old factory produces 100,000 tonnes of cement annually with a market share of 30 per cent in Rwanda.
The increased production will help bring down the cost of cement and Rwanda's reliance on imported cement, Busisiwe said.
A bag of cement currently costs between Rwf8,300 and Rwf9,200, depending on the brand.
Peat as an alternative source of energy
Kalinganire said that on top of the concluded deal, there were ongoing negotiations for the supply of peat to the 15MW power plant under construction by the Energy Water and Sanitation Authority (EWSA), where the demand is five times higher than CIMERWA's.
"Our main purpose is to mine and harvest peat available in its concessions which are found in Gishoma, Mashya, Gihitasi and Rwabusoro one and two," he said.
"Although PEC first started as a pilot project, RIG realised the promising future the project would have for the group but also for the country as a whole."
He added that it was in that context that in April 2008, RIG invested heavily in the purchase of peat harvesting and mining equipment.
"Our vision is to be the leader in peat mining in the East African region," he concluded.