Namibia: Biofuel Boost for Cement-Maker

Manufacturing cement is energy intensive and can be a burden on the environment. Namibia's Ohorongo Cement plant has come up with an environment-friendly innovative solution with a competitive edge.

You can hear it long before you can see anything. Slowly and relentlessly, the specially developed harvester cuts its way through the tangled undergrowth. Blackthorn can grow to as high as seven meters (23 feet) and form impenetrable thickets. It won't let any other species grow in the vicinity, much to the chagrin of local famers. But the harvester rips through it, turning the bush into wood chips.

They are used for fuel by Ohorongo Cement, Namibia's only cement manufacturer, giving it a potential edge over some of its competitors on the world market. Biofuel accounts for 30 percent of Ohorongo's energy needs; eventually the company wants to raise this figure to 80 percent.

Gerhard Hirth: 'Africa was new - and different'

"In the long term, we will be very competitive," said manager Gerhard Hirth. Not having to rely on coal and oil imports, the company was able to keep energy costs down while making a positive contribution to the environment.

"We have the technology and the raw materials to produce high quality cement. We manufacture it economically with staff we have trained ourselves who are really very good workers," he said.

Hirth, a German national, comes from Ulm. The family firm Schwenk Zement KG has been in the cement business for the last 160 years. "Nonetheless," he said, "Africa was new - and different."

A small player compared to South Africa

Hirth has invested 250 million euros ($340 million) in Namibia. As well as deploying modern technology, he also chose a logistically favorable location from which his high quality building material can be freighted to Botswana, Zimbabwe and Zambia.

Otavi resident Hilma Sahaanika says most the jobs at the cement plant have gone to people from the big cities

While Hirth is in his office pouring over his balance sheets, 50 kilogram (110 lb) sacks of cement are coming off the conveyor belt in rapid succession. The plant produces 600,000 tons annually, of which 500,000 is destined for the Namibian market. The rest is exported. Namibia is only a small cement producer, neighboring South Africa is a much bigger player turning out 16.5 million tons a year.

Ohorongo's aluminum outbuildings glisten in the midday sun. The landscape appears deserted, apart from a truck stirring up a trail of yellow dust on the horizon. Local residents, on discovering that a major investor is planning a huge project nearby, are often skeptical. But the people of Otavi appear contented. Jona Israel is filling up his Landrover at a gas station. "By and large, it is a development we are happy with," said the haulage contractor. "The factory is a big investment, not just for our region but for the whole of Namibia." His trucks are now delivering cement so he has profited personally from the arrival of the plant. Hilma Shaanika believes the benefit to the local community has been minimal. "The jobs went mostly to people from the big cities, from Windhoek and Swakopmund. But people in Otavi are poor," she said.

Production manager Manfred Pirker concedes that many of the staff come from the cities, but says well trained skilled workers were difficult to find in northern Namibia. The company will have to train more workers itself in future.

A few houses further down, Matsika Farai David is sitting behind an array of household goods he is selling - plastic combs, pots and batteries. "Of course Ohorongo has improved our lives," said the street vendor. "Many who used to hang around out on the streets now have a job to go to." In addition the company has done work on the road and donated an ambulance to the local hospital.

Ohorongo Cement's management say the company has directly or indirectly created some 2,500 jobs

No escape from Chinese competition

Ohorongo Cement employs 330 people but it has also generated employment indirectly as well. Job opportunities have been created for subcontractors, which wouldn't exist if the plant wasn't there. They include supplying catering, work clothes, and freight haulage. Ohorongo's management says the company keeps a total of 2,500 people in work. In Namibia, where 30 percent of the labor force is unemployed, every one of those jobs matters.

Ohorongo's company history is a good guide to the obstacles littering the road to entrepreneurship in Africa. Markets can be fickle. Ohorongo had counted on being able to sell cement to oil-rich Angola. "That was a mistake," said Gerhard Hirth. Angola slapped an import ban on Namibian cement. Angola's cement now comes from China.

Hirth said the Chinese are always a few cents cheaper than their competitors. The Namibian government had promised Ohorongo Cement it would be protected while in its initial growth phase by a tariff agreement. Cement imports from outside Namibia would be subjected to a 60 percent levy. But now there is a Chinese importer operating in the country, paying no levy and offering cement at competitive prices. He had taken legal action against the tariff agreement. "The cement is already in Namibia and we have lost more than 30 million euros," Hirth said. Legal proceedings are still in progress and are unlikely to end anytime soon.

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