26 February 2018

Rwanda: Cement Companies Scramble for a Piece of Rwandan Market

Regional cement manufacturers are fighting for a share of the Rwandan market at a time when current market leaders are struggling to stay afloat.

Rwanda imports 46 per cent of its cement to meet the growing demand, offering an opportunity to producers seeking to extend their regional footprint.

"The national cement demand has reached 50,000 tonnes per month," said Annette Karenzi, director-general of industries and entrepreneurship development in the Ministry of Trade and Industry.

"At least 23,000 tonnes are imported while Cimerwa produces 27,000 tonnes," she added. Cimerwa Cement is majority owned by Pretoria Portland Cement (PPC).

Tanzania's Dangote Cement, Lake Cement, manufacturers of the Nyathi brand and Tanga Cement, the producer of Simba brand, are some of the regional players fighting it out with Uganda's Hima for the Rwandan market.

While Cimerwa increased annual installed capacity to 600,000 tonnes in 2015, data shows that Cimerwa production oscillates between 60 per cent and 70 per cent.

Operations at Rwanda's second largest plant -- Kigali Cement Company -- owned by Nairobi Securities Exchange-listed ARM Cement, have lately been on and off.

The plant with an annual capacity of 100,000 tonnes has suspended operations because of shortage of raw materials. The plant imports clinker from Tanga, but Tanzania banned import of coal, a source of energy for making clinker.

"For a couple of years, the company has not been producing on a regular basis and to capacity due to limited availability of clinker from Tanzania," said Pradeep Paunrana, ARM Cement managing director.

Mr Paunrana said the coal shortage has now eased, and Kigali Cement will resume operations.

Another challenge holding back the plant's expansion is an ongoing court battle between Rwanda Enterprise Investment Company (REIC), the former owners, and the current owners over a $500,000 debt.

It has taken two years for the courts to decide whether it is Kigali Cement Corporation or Kigali Cement Company which owes REIC the loan.

Rwanda is also betting on the third local manufacturer, Prime Cement, after the government indicated that it had secured money to carry out expropriation of land. Prime Cement signed a deal with a Danish company FL Smidth mid last year to build the $65 million plant.


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