Ready, get set, go re­gional

Ce­ment pro­duc­ers are in in­tense com­pe­ti­tion as Cameroon be­comes a grow­ing base for com­pa­nies look­ing to ac­cess land­locked neigh­bours

The Africa Report - - COUNTRY FOCUS -

Cameroon’s ge­og­ra­phy and its role in the Com­mu­nauté Economique et Moné­taire de l’afrique Cen­trale (CEMAC) are ben­e­fit­ing the coun­try’s ce­ment sec­tor. It has been at­tract­ing new com­mit­ments which could help turn the coun­try into a size­able ex­porter within the next two years. This could also be a boon for Cameroo­nian con­sumers, although the end of La­farge­hol­ci­mowned Ci­men­cam’s mo­nop­oly a few years ago has not led to a sig­nif­i­cant drop in re­tail prices. Ce­ment firms have been tak­ing ad­van­tage of a 2013 law on pri­vate investment that in­cludes tax and other ex­emp­tions dur­ing the set-up and op­er­a­tional pe­ri­ods. Af­ter se­vere ce­ment short­ages were recorded in 2008, the govern­ment has been look­ing to strengthen lo­cal pro­duc­tion and di­ver­sify in­vestors in the sec­tor. In the past three years, three new ce­ment plants have opened in Cameroon. Moroc­can-owned Ci­ments d’afrique (Ci­maf ) got started in early 2014, while Nige­ria’s Dan­gote Ce­ment be­gan op­er­a­tions in April 2015 and Turk­ish-cameroo­nian joint ven­ture Med­cem fol­lowed in June 2015. All of Cameroon’s four main pro­duc­ers have plans to ex­pand their pro­duc­tion in the com­ing years. Ci­men­cam, which has op­er­ated in the coun­try since 1963, be­gan con­struc­tion of a plant with the ca­pac­ity to pro­duce 500,000tn per an­num at No­mayos, out­side of Yaoundé, in March of this year. Ci­maf Camer­oun, owned by Moroc­can con­struc­tion com­pany Ad­doha, is set to triple its pro­duc­tion ca­pac­ity of 500,0000tn per year by 2018. Mar­ket leader Dan­gote Ce­ment Cameroon is work­ing on a new plant in Yaoundé (see in­ter­view). And fi­nally, Turk­ish-backed Med­cem is work­ing on in­creas­ing the ca­pac­ity of its plant from 600,000tn to 1m tonnes. New­comer Mira Ce­ment is also talk­ing up its plans to build a 1m-tonne plant in Douala, where most of the other plants op­er­ate. If all of the projects come to fruition, Cameroon could be pro­duc­ing 9m tonnes per an­num in a few years’ time and ex­port­ing to neigh­bour­ing coun­tries such as Chad and the Cen­tral African Repub­lic. That would be a big boost for re­gional trade, as the CEMAC lags be­hind other African re­gional or­gan­i­sa­tions, with in­tra-re­gional trade accounting for less than 2% of to­tal trade. Busi­nesses have long com­plained that weak in­fra­struc­ture and a lack of in­ter­gov­ern­men­tal co­op­er­a­tion have held back trade be­tween Cen­tral African coun­tries. Ce­ment prices are much higher in land­locked Cen­tral African coun­tries like Chad, where a 50kg sack of ce­ment sold for 11,000 CFA francs ($18.8) in 2016. As Cameroon has no com­mer­cial lime­stone mines to pro­vide an im­por­tant raw ma­te­rial – clinker – ce­ment pro­duc­ers have to im­port it. And as the govern­ment is strug­gling to raise rev­enue amidst lower com­mod­ity prices and the fight against the Boko Haram Is­lamist mil­i­tants, Yaoundé has de­cided to dou­ble du­ties on clinker im­ports to 10% this year.


Com­pa­nies say that moves like these will keep prices higher for con­sumers. Ci­maf chief ex­ec­u­tive Ab­de­ladim Arnous told lo­cal me­dia in June: “In­vestors in Cameroon are be­tween a rock and a hard place. You have to pay more taxes, you have to pay more cus­toms du­ties, you have to drop prices. It is an ex­tremely com­plex equa­tion.” Prices tend to fluc­tu­ate, and a 50kg sack of Ci­men­cap CPJ35 ce­ment was sell­ing for 4,200 CFA francs ($7.17) in Douala in June, rep­re­sent­ing a 200 CFA franc rise on re­cent prices. For about a decade, the govern­ment has been look­ing for a devel­oper for the lime­stone de­posit at Min­tom, in south­ern Cameroon. It has es­ti­mated re­serves of 540m cu­bic me­tres, and the mines min­istry says that the com­pany Cageme

has the ex­plo­ration rights to the prop­erty. In­dus­try sources say that much of the lime­stone is cov­ered in wa­ter, mak­ing the launch of op­er­a­tions com­pli­cated. If more stud­ies show that pro­duc­tion is fea­si­ble, it would lead to lower prices for lo­cally pro­duced ce­ment. Pres­i­dent Paul Biya’s govern­ment has grad­u­ally been push­ing the devel­op­ment of grands pro­jets like dams, sta­di­ums for the 2019 Africa Cup of Na­tions foot­ball tour­na­ment and so­cial hous­ing projects, which should be a boon for the con­struc­tion sec­tor. Dan­gote Ce­ment Cameroon coun­try man­ager Paavo Wiro tells The Africa Re­port: “The coun­try has a lot of projects but they have been very, very late be­cause some projects have been de­layed seven or 10 years. And now it is com­ing out pro­gres­sively, so that is very good.” While the govern­ment es­ti­mates that con­struc­tion will con­trib­ute 0.4% to eco­nomic growth for each of the next three years due to an uptick in ac­tiv­ity, find­ing re­spon­si­ble com­pa­nies con­tin­ues to be dif­fi­cult. In 2016, the pub­lic works min­istry black­listed 122 firms from bidding for govern­ment con­tracts for two years be­cause of their fail­ure to re­spect con­trac­tual de­tails. Rein­nier Kazé in Douala and Mar­shall Van Valen

Dan­gote Ce­ment went from zero to 50% mar­ket share in Cameroon in just one year, with its Douala plant

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