CIMERWA Plc has announced a Rwf5.2billion net profit in the interim period (six months for the period ended March 31) with total revenue of Rwf44billion, indicating a 45 percent increase compared to the same period last year.
The New Times' Alice Kagina had an exclusive interview with Albert Sigei, the CEO of CIMERWA Plc, where he weighed in on the company's half year performance and plans for the market outlook.
What are the main factors that led to the recorded financial growth?
It has been a great six months and the main factors that helped us include; improvement in plant operating efficiency and also some projects that allowed us to open up additional air capacity organically within the factory.
If you look at the 12 months to March 2022, our capacity utilization has been above 85 percent, for a manufacturing entity, it is quite decent but we still have things to work on.
The other thing that has enabled us to achieve this level of growth in terms of top line is the Rwandan market itself. In spite of the impact of Covid-19 and other factors in the last two years, the market remained steady and in fact, it has grown.
The Rwandan market has grown by an estimated three percent over the twelve months, and while three percent may sound a little bit low, we need to remember that in the previous year, it had grown by a whopping 20 percent, so it's three percent on top of 20 percent which is very commendable.
This has been possible because of the activities within the country as we have seen faster recovery (from Covid-19) than other economies, as well as interventions and other infrastructural projects going on in line with the government's vision at an accelerated pace.
Projects that followed the construction of major infrastructure projects such as building of Amahoro Stadium, the Bugesera Airport, and many others in the pipeline.
Lastly, this growth has been possible because of our intentional efforts around the routes to market, we really worked on various channels including expanding them and making sure we serve them very well. It also goes to the efforts of the staff, the board and other stakeholders that have given us commendable support.
How much did the company sell during this half-year?
In the half year, we sold more than 275,000 tonnes which is a very good pace compared to the same period last year. Recently, we made an announcement about crossing half a million mark which means we are on course to do even better than the previous year where we did about 520, 000 tonnes in a full year.
There's been a 62 percent increase in exports, in light of this, how is the local demand versus supply, given the trend of construction projects that we are seeing?
Our priority is the domestic market. In fact, 80 percent of our production serves the domestic market and it's only 20 percent that goes into exports. But this 20 percent is also important for the country because we bring in forex and also for us because we have dollar-based requirements.
The domestic market is satisfied very well as of today. I think we've been able, as an industry in Rwanda, to serve the needs of various domestic projects and we are the anchor supplier of the airport project and so far, we have served its needs capably.
I am also glad that we are not the only ones who are serving the needs of Rwanda, we have competition and together we are able to serve the country.
How is CIMERWA faring amidst competitors on the market?
Competition is very good for us because it gets our creative juice flowing and brings us up on our feet in terms of innovation and how to do things differently.
It's good for the industry and the consumer, having another local player in Rwanda has widened the choice for consumers.
In CIMERWA, we are focused on our strategy of delivering to strengthen Rwanda as per our brand policy and the strategic objectives have led to the increase of our offering in terms of range of products such as SureRange and we are thinking more about how to consolidate our leadership position.
In a period where fuel prices and the prices of other goods are skyrocketing, what is CIMERWA doing to curb price speculation on the market?
We are doing several things within our control.
One of them is to see how we can save on cost, and it takes various measures such as looking at our processes and see how we can produce the same bag of cement at a lower cost, how we can make the most efficient energy use by increasing alternative source of energy as opposed to expensive gold.
Through all those, we are able to mitigate the cost increases, however, this is not enough because of the double-digit increase in transportation and fuel. In order for us to be sustainable, we are enforced to go through some modest price increases.
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But we work with people responsible in the market and ensure they are reasonable in prices they put there but at the end of the day, the price to an end consumer is not a decision of CIMERWA but traders in the market. However, we are working with them and relevant authorities to make sure that people don't take advantage of situations, like we are facing today, to unduly raise prices on the market.
CIMERWA has a production capacity of 600,000 tonnes yet it is only recently that you hit a production record of 520,000 tonnes produced in a year, what are you doing to reach optimum capacity?
Before 2015, we were at 100,000 tonnes and with the new investment, we have gradually come up to stand at 520,000 tonnes. It's a solid achievement, however, our eyes are cast on doing even better.
Over the next two or three years, we should be getting above 90 percent of capacity utilization, we are looking at how to exceed the 600,000 tonnes but I must say that the effort and achievement the team has made to reach close to 85 percent utilization is commendable.
Our shareholders and stakeholders should expect this continued solid performance by the company and consumers should expect the same trend of good performance on the production front, a continuation of good service and even expansion of what we offer on the market.
