CIMERWA to upgrade Bugarama plant
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CIMERWA, arguably the dominant cement business player in the country, has disclosed that it will be carrying out a major maintenance and upgrading plan of its Bugarama plant, located in Rusizi District in Western Province.
The plan, company officials say, will include maintenance as well as modification and upgrade of the existing plant to be able to meet the current cement demand, both locally and in the region.
“In a week from now, we will be going through aggressive maintenance towards ramping up our plant capacity to take advantage of the growing market that is out there in Rwanda. The plan will include upgrading some sections of the plant,” Bheki Mthembu, the company chief executive officer, revealed without disclosing how much will be invested.
The company is currently servicing the US$170 million loan that it invested in the Bugarama plant, which it received from a portfolio of local banks.
The firm, a subsidiary of South African based Pretoria Portland Cement (PPC) cement manufacturer, currently has a market share of well above 50 per cent. But Mthembu said that there was a need to work towards gaining more market share as infrastructural development is booming.
“The whole idea is to be able to gain much more control in the market share. We are doing this because the future of infrastructure delivery in Rwanda is very positive and it is booming,” he noted, adding that they are in a much better place than they have ever been before as far as infrastructure delivery is concerned.
Mthembu was speaking during ‘CEO Roundtable’ discussion with the media on Monday at the Kigali Convention Centre (KCC). The official said that this plan will help them serve mega infrastructural projects like the new Bugesera Airport and other on-going road construction and expansion projects.
He, however, clarified that this does not mean that the plant will be shut down as some people have been thinking, and that it won’t affect product availability on the market.
“We are currently looking at the stock levels and trying to strategise on what is the maximum stock that we need to keep as the activity will be going on. The activity will start mid-March and end in April,” he noted.
At present, the plant is running at about 65 per cent of its production capacity of 600,000 tonnes per year. But company officials think that by mid-2019 they will have started producing at the full capacity.
However, last year the company had announced that it would produce to its full capacity by mid-2018.
Although many customers in the market still feel the cost of CIMERWA cement is a bit higher compared to other cement products from the region, Mthembu said that their price in Rwanda has been going down by 5 to 6 per cent year-on-year since the launch of the new plant.
Last year the firm exported 10 per cent of its total output, predominantly to eastern Democratic Republic of Congo and Burundi. The volume of cement sold stood at about 380,000 tonnes.
As construction sector is expected to grow at the rate of 6 per cent, CIMERWA targets to cash in on the growing demand. But one big issue that still exists is the cost spent on importation of raw materials. The firm has been importing nearly 80 per cent of its raw materials, mainly coal from Malawi and Tanzania.
Mthembu said, there is a need for the Government to work with existing players towards providing alternative, cheaper sources of coal as importing it is very expensive and makes the whole cost of operation high.