HeidelbergCement considers SA and Mozambique production move

RSS674 HeidelbergCement is considering adding South African and Mozambique production capacity as the German company seeks to tap growing demand for construction material in Africa, reports Bloomberg.

“Africa is an important part of our emerging markets exposure,” chief executive Bernd Scheifele said in a recent interview. 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 is growing at a rate of about 5 million tonnes/year, he said.

Scheifele was speaking in Ouagadougou, the capital of Burkina Faso, before the opening of a US$50 million grinding plant in the West African country.

The factory will produce 700,000tonnes/year, boosting the Heidelberg, Germany-based manufacturer’s annual capacity on the continent to about 10 million tonnes, he said. HeidelbergCement added 2.9 million tonnes of capacity in Africa last year, its biggest growth region, Scheifele said February 10 this year.

The cement maker operates in Ghana, Benin, Liberia, Tanzania, Sierra Leone, Togo and Democratic Republic of Congo.

Bloomberg reports how demand for infrastructure has made Africa a target for cement makers including 725 Lafarge SA, which is merging with Jona, Switzerland-based 680 Holcim to create the world’s biggest producer. The Paris-based company plans to boost capacity at its plants in Nigeria and South Africa to more than 20 million tonnes by 2020 from 12 million tonnes, Anders Kristiansson, chief financial officer of the Africa unit, said in December.

7635 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 tonnes by the end of this year. In South Africa, PPC Ltd. 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 the country’s southern neighbour Togo, where the company is also building a $300 million clinker plant. Scheifele declined to give Bloomberg further detail about the investment plans.