Prime Cement pegs success on 1.2 million tonne plant

Tuesday September 4 2018

Cement

Data from the Ministry of Trade and Industry shows the country’s national cement demand reached 50,000 tonnes per month this year. PHOTO | CYRIL NDEGEYA 

By ARAFAT MUGABO
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Prime Cement, a subsidiary of Angola-based Milbridge Holding Group, could dominate the Rwanda cement market if the 1.2 million tonne capacity plant is completed in the coming years.

Construction of the first phase of the cement plant in Musanze, Western Rwanda started two weeks ago. Prime Cement said the $70 million plant with a 600,000 tonnes capacity will be expanded to have a 1.2 million annual installed capacity.

“The first phase of the plant will be completed in July — August, 2019. The second phase will start in August 2020,” said Vincent Budumbula managing director of Afriprecast.

Once the new plant is complete, the country’s total installed cement production capacity is set to increase by 62.5 per cent from 800,000 tonnes a year to 1.3 million tonnes annually.

Data from the Ministry of Trade and Industry shows the country’s national cement demand reached 50,000 tonnes per month this year, which translates to 600,000 tonnes annually. About 46 per cent of the cement was imported.

Analysts say while existing plants can meet local demand, they are operating below their installed production capacities, leading to supply gaps and raising the cost of cement.

Cimerwa PPC, has a capacity to produce 700,000 tonnes, but analysts say it is operating at 60 per cent capacity. A struggling Kigali Cement — owned by Nairobi bourse-listed ARM Cement Ltd — which has a 100,000-tonne annual installed capacity, has only reached a production capacity of 30 per cent. The factory suspended its production.

Prime Cement is betting on increased production to compete on pricing as it seeks to dominate the market.

“We plan to meet the current market demand and also cater to projected demand in the years to come,” Mr Budumbula told Rwanda Today.

Market analysts expect cement demand to grow sharply, boosted by the government’s push on big infrastructure projects and continued focus on affordable housing schemes.

The regional markets in Tanzania, Uganda and Burundi, especially those bordering Rwanda also offer viable opportunities as cement plants in those countries are located far away.

For instance, transporting cement from Tanga to Kagera region increases the final cost of cement in Tanzania.

Prime Cement will use locally sourced pozolona — a major raw material used in production of cement.

The deposits are found in Cyimunye sector in Musanze District and this reduces production costs.

Currently, cement makers grind pozolona with clinker that is imported from Kenya and gypsum from Tanzania.

According to Prime Cement, the quality of cement is expected to be better as Rwanda’s pozolona has unique qualities compared with the rest of East Africa.

“We are committed to produce quality cement in Rwanda and outcompete the already existing cement factories through use of a smaller carbon footprint and less energy consumption,” said Francesco De Martino, CEO of Milbridge Group.

The cement factory will be constructed in the industrial park of Musanze District. Although the factory will be based in Musanze Industrial Park, Mr De Martino said its establishment will create jobs for the people in the sub-region and reduce the cost of a 50kg bag of cement to about $8 dollars from the current $11 dollars.

Prime Cement says it will create new jobs in the country and even outside Rwanda, but residents of Cyimunye have already started to see the positive impact of the plant.

According to Mr De Martino the company is expected to create 200 direct jobs in the first phase and 500 direct jobs in the second phase including over 100 permanent employees.