German cement maker to invest in SA
HEIDELBERGCEMENT, the thirdbiggest cement maker, is considering adding South African and Mozambique production capacity as the German company seeks to tap growing demand for construction material in Africa.
“Africa is an important part of our emerging markets exposure,” chief executive Bernd Scheifele said last week. The continent “has seen very stable growth in demand for cement in the last few years, which is independent from what’s happening in the world economy”.
Demand was growing at a rate of about 5 million tons per year, he said.
Scheifele was speaking in Ouagadougou, the capital of Burkina Faso, before the opening of a $50 million (R601m) grinding plant in the West African country.
The factory would produce 700 000 tons a year, boosting the Germany-based manufacturer’s annual capacity on the continent to about 10 million tons, he said.
HeidelbergCement added 2.9 million tons of capacity in Africa last year, its biggest growth region, Scheifele said in February. The cement maker operates in Ghana, Benin, Liberia, Tanzania, Sierra Leone, Togo and Democratic Republic of Congo. Its stock has gained 20 percent this year, valuing the company at € 13.3 billion (R174bn).
Demand for infrastructure has made Africa a target for cement makers including Lafarge, which is merging with Switzerland-based Holcim to create the world’s biggest producer.
The Paris-based company planned to boost capacity at its plants in Nigeria and South Africa to more than 20 million tons by 2020 from 12 million tons, Anders Kristiansson, the chief financial officer of the Africa unit, said in December.
Dangote Cement, Africa’s biggest producer of the building material, plans to expand into 14 African countries outside its home Nigerian market and is investing about $4 billion to boost capacity to 50 million tons by the end of this year.
In South Africa, PPC and AfriSam are in talks to merge the country’s two biggest cement makers to step up expansion on the continent.
HeidelbergCement will supply its Burkina Faso unit with raw materials from neighbouring Togo, where the company is also building a $300m clinker plant.