The Government of Rwanda has extended deadline to sell off its stake in Cimerwa on the market to July 19, (this Friday), in a bid to give a chance to more individual investors and companies. This is according to a notice by Rwanda Development Board.
The initial deadline was July 5 for interested investors to submit the proposals to buy the stake.
The Government has 16.54 per cent stake in Cimerwa held through Agaciro Development Fund, Rwanda's sovereign wealth fund. However, other shareholders, including SORAS Group, Rwanda Social Security Board (RSSB), and Rwanda Investment Group (RIG) have also expressed interest in offloading their shares.
The total share held by the Government and its affiliates amount to 49 per cent. In total, 17,228,878 shares are available for investors.
Currently, South Africa-based Pretoria Portland Cement (PPC) is the majority shareholder in Cimerwa with 51 per cent shareholding which it bought back in 2012.
The firm had been expected to turn around the cement industry but Government lost patience and interest after the former failed to meet the domestic demand for cement.
Consumers continue to decry high prices of cement and data shows that more consumers are still importing cement, especially from the region.
While Cimerwa is the largest cement producer in the country, but the firm is currently unable to meet local demand as it operates below its production capacity of 600,000 tonnes per year.
Last year, Cimerwa produced only 364,864 tonnes of cement - less than 60 per cent of the total demand. The country imported 318,854 tonnes to meet the demand of 640,455 tonnes, according to statistics from the National Bank of Rwanda.
The company has been making losses over the years. The firm accumulated losses worth Rwf7.4 million as of September 2016. In the following year, over the same period, the firm's losses stood at Rwf5.5 million and that increased to Rwf7.1 million in September 2018.
This is also at a time when Rwanda's cement demand has been rising. Cement demand moved from 493,587 tonnes per year in 2013 to 640,455 tons in 2018.
This is a result of on-going mega infrastructure projects like the construction of Bugesera International Airport in Eastern Province, and Gisagara peat energy plant in Southern Province.