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October 16, 2019
Feature

New cement player makes US$70 million entrywith 1.2 million tonne plant

“ The first phase of the plant will be completed in August —2019 the second phase will start  in August 2020,”

said Vincent Budumbula managing director of Afriprecast- a corporate shareholder to the new venture.

The ongoing construction boom has facilitated entry of a new player in Rwanda’s cement manufacturing sector which is considered a key ingredient of local property development sector.
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. The new player promises to level playing field in the cement making sector by among other things striving to reduce retail prices of cement in the market. Construction of the first phase of the cement plant in Musanze, Western Rwanda started in late August 2018.
Prime Cement says the first phase of the plant will be completed in July — in August 2019, The second phase will start in August 2020,” said Vincent Budumbula managing director of Afriprecast- a corporate shareholder to the new venture.
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 Ltd the dominant manufacturer , has a capacity to produce 700,000 tonnes, but analysts say it is operating at 60 per cent capacity. A str ggling Kigali Cement Co Ltd — owned by Nairobi bourse-listed ARM Cement Ltd — which has a 100,000-tonne annual installed capacity, has only reached a production capacity 30 percent. The factory suspended their production this year due to a number of issues dodging its operations.
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 says.

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 boardering Rwanda also offer viable opportunities as cememt factories in those countries are very 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 sctor 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 inputs from 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 shareholder in Prime Cement.

The cement factory will be constructed at the newly unveiled Musanze industrial park with prospects of creating jobs for the people in the sub-region and striving to reduce the cost of a 50kg bag of cement to about $8 dollars from the current $11 dollars.
According to Mr De Martino the company is expected to create 200 direct jobs in the first phase and 500 jobs in the second phase including over 100 permanent employees.

In Summary

  • 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 in late August 2018.
  • Prime Cement says the $70 million plant with a 600,000 tonnes capacity will be expanded to have a 1.2 million annual installed
    capacity.
  • The new entrant further promises to level playing field through reducing retail prices of cement to about US$8 from current US$11 for 50 Kg bag those who will make a personal contribution of 10 per cent toward the cost.

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