SENEGAL: Dangote Draws Nigeria, France Into 'Cement War' in Senegal

Its shimmering azure chimney stacks towering into the sky, the latest cement works launched by Africa's richest man lies idle in a Senegalese meadow - stopped in its tracks by legal action and cut-throat competition in a rapidly growing industry.

Nigerian industrialist Aliko Dangote's cement business has been flourishing elsewhere in Africa and the Senegalese project, first conceived four years ago, was due to start production in June.

But the west African nation's government is being taken to a regional arbitration court in Ivory Coast by French manufacturer Vicat, which claims that the plant represents a "distortion of competition" in a country where the market is already saturated.

"This is the first time in the history of Senegal that we have seen a plant built in violation of all the rules," said Boubacar Camara, president of Sococim, a Senegalese subsidiary of Vicat.

Dangote, 56, made his first fortune in Nigeria more than three decades ago when he started trading commodities with a loan from his uncle.

His cement business is the jewel in the crown of the Dangote Group, the largest industrial conglomerate in west Africa according to Forbes magazine, which describes Dangote variously as "the richest black person in the world" or "Africa's richest man", with a personal fortune of $25 billion (18 billion euros).

He has been expanding his empire outside of Nigeria in recent years -- Dangote Cement now has operations in 15 African countries -- but the Senegal project and the court case aiming to stop it may come to represent a frustrating inability to leverage his influence across the entire continent.

4,000 jobs

"A cement plant is dangerous, you need permits, prior authorisation and you also have to conduct an environmental impact study. That hasn't been done," Camara told AFP.

The water-cooling technology involved in the $630 million (457 million-euro) plant would require a daily withdrawal of 4,500 cubic metres of groundwater, a precious commodity in an arid Sahelian country like Senegal, according to Camara.

"It's a race against the clock. Once production begins, it will be much more difficult to intervene," Camara told AFP.

ALGERIA: L’égyptien ASEC Cement veut céder sa participation minoritaire

Dans le cas de la cimenterie de Zahana, la compagnie égyptienne ne dit pas tout sur les raisons de cette volonté de se désengager du capital de l’entreprise algérienne.

La compagnie égyptienne ASEC Cement, une filiale de Citadel Capital, a entamé des «pourparlers préliminaires» avec GICA, la société holding qui contrôle toutes les entités du secteur public opérant dans le domaine des matériaux de construction, en vue de céder sa participation minoritaire dans la cimenterie publique de Zahana, implantée dans la wilaya de Mascara, a annoncé Citadel Capital dans un communiqué, rendu public jeudi dernier. Yahia Bachir, directeur général de GICA, avait déclaré publiquement que l’Etat algérien étudie le rachat des actions minoritaires de son partenaire égyptien dans un projet de cimenterie.

Ahmed Heikal, président et fondateur de Citadel Capital, a confirmé que sa firme est «actuellement en pourparlers préliminaires avec GICA en vue d’obtenir la sortie de la participation minoritaire d’ASEC Cement dans Zahana». Une démarche qui est, d’après lui, «en ligne avec notre objectif à l’avenir de tenir seulement des participations majoritaires dans l’ensemble de nos filiales de base». La firme de capital-investissement, basée au Caire, ayant des investissements au Moyen-Orient et en Afrique du Nord, cherche à se dessaisir aussi des avoirs non stratégiques au cours des trois ou plusieurs années à venir.

Dans le cas de la cimenterie de Zahana, la compagnie égyptienne ne dit pas tout sur les raisons de cette volonté de se désengager du capital de l’entreprise algérienne. Fin 2008, ASEC Cement avait acquis une participation de 35% dans la cimenterie de Zahana, propriété de l’Etat algérien, assortie d’un droit de management, pour un montant de 32,6 millions d’euros. L’objectif était de porter ses capacités de production de 800 000 tonnes de clinker par an à 2 millions de tonnes/an.

Mais il semble que cet engagement n’ait pas été respecté, puisque seulement les travaux de génie civil pour la réalisation d’un nouveau broyeur pour augmenter la production de clinker à 1 million de tonnes et celle de ciment à 1,2 million de tonnes ont été achevés. Récemment, le président de GICA, Bachir Yahia, indiquait à Oran que «le GICA a signé une convention permettant à la société égyptienne de gérer l’usine de Zahana, mais les objectifs tracés concernant notamment l’apport de l’expérience et l’amélioration du rendement ne sont pas concluants». Cette usine produit 750 000 tonnes de ciment/an, ce qui nécessite seulement 300 travailleurs au lieu de 750 actuellement, dont 164 recrutés en 2011 dans le cadre social, selon les explications du responsable algérien.

La direction du GICA, avait-t-il précisé, «évalue l’expérience de manière objective et rationnelle pour sortir avec une décision qui satisfait toutes les parties». En plus de la cimenterie de Mascara, ASEC Cement détient une participation de 68% dans une cimenterie de Djelfa, actuellement en construction. C’est le plus important des investissements d’ASEC Cement avec une capacité de production de 3 millions de tonnes par an, pour un coût global qui dépasse les 600 millions de dollars.

NIGERIA: SON may scrap 32.5 cement grade

Indications emerged on Wednesday that the Standards Organisation of Nigeria may scrap or modify the controversial 32.5 grade of cement, which is currently the lowest grade produced in the country.

Over the past few weeks, there have been debates on the right standard for cement and its contribution to building collapse in the country.

The decision to scrap or modify the 32.5 grade comes on the heels of a stakeholders’ technical meeting held in Lagos on Monday, which was convened by SON.

According to a source, who attended the meeting, when the 32.5 grade is scraped, the 42.5 grade, which is currently being used for heavy construction works, including bridges and high rise buildings, will become the lowest grade in the country.

“Invariably, the 32.5 will either be scraped or retained with some modifications,” the source disclosed.

When modified, the 32.5, which is presently the commonest type of cement for building construction, will only be allowed for certain aspects of construction other than for house construction.

Some stakeholders have raised concerns over the production of the 32.5 grade of cement in the country against the 42.5 grade that was earlier approved by SON for imported brands.

Some manufacturers have also commenced the production of the 42.5 grade of the product and above.

The Director-General, SON, Dr. Joseph Odumodu, had said during the inauguration of the technical committee to review the standard framework of the product, that there was no substandard cement in the country, adding that misapplication of both the 32.5 and 42.5 grades was what compromised the integrity of a building structure.

He had said, “It has become very important for us to review the standard of the product in order to safeguard lives. My interest is to ensure that Nigerians do not die from avoidable deaths. It is quite unfortunate that the cement issue has been politicised.

“We do not need to mix politics with technical issues. We want to follow the due process in making informed decisions.”

Major players in the industry are, however, divided on the development.

The Chief Executive Officer, Lafarge Cement WAPCO Nigeria Plc, Mr. Joe Hudson, had said the standard of cement being produced in the country was good and that the problem of building collapse was not that of cement, but a problem of enforcement of proper building standards and practices.

“We have different types of cement for specific applications; it is a misnomer to say that cement is responsible for building collapse,” he said

SRI LANKA: Singha cement terminal to be completed next year

Singha Cement (Pvt) Limited is constructing a multi-million-dollar new state-of-the-art cement terminal, which is due to be completed next year. As a result of the new expansion, the Company will double its existing capacity. 

“The reason for this expansion is to meet the high demand for Singha cement in the country as well as to provide an enhanced, quality service to our customers,” said Colin Nelson, Managing Director of the company.

Meanwhile, Singha Cement, marketers of the popular Singha cement brand, and a member of the Italcementi Group, which is among the top five largest producers of cement in the world based in Italy, felicitated employees who have been with the company for over ten years. 

The Italcementi Group is also one of Italy’s ten largest industries, with operations in 22 countries and 46 cement plants worldwide.

The employees who have completed ten years service were Lalith Piyathissa, W. A. K. Piyadasa, K. R. A. Bandara, P. G. Aanda Tissa and W. A. Prasanna, all of whom received generous cash rewards from Managing Director, Colin Nelson. 

“We take this opportunity to thank our employees for their long term service and contribution. More than 35% of our employees have completed ten years of service so far and we are so proud of having a loyal and a committed workforce. Whilst we appreciate our employees, we wish to thank our customers for their tremendous contribution towards the growth of Singha Cement,” said Nelson.

Singha Cement currently operates and maintains a land based terminal at Peliyagoda, equipped with the necessary technology to receive and handle both bulk as well as bagged cement in the most efficient manner.

The company is ISO 9001 certified and its cement is in compliance with SLS 107, meeting all required regulatory standards of Sri Lanka. 

The Italcementi Group is a member of the World Business Council for Sustainable Development (WBCSD) and has signed the Cement Sustainability Initiative’s Agenda for action.

“At Singha Cement we aim to maximise customer satisfaction, with continuous improvement in all spheres of activity” said Nelson, who adopts a ‘hands on’ approach.

INDIA: Political crisis, slowdown impact AP cement firms

The cement industry in Andhra Pradesh is facing a crisis. Prices have nosedived by ₹50-60 a bag, hitting a new low, below ₹200. Production in most units is just around 50 per cent of capacity and many are in the red.

Power crisis and economic slowdown continue to trouble the sector. State capital Hyderabad today retails this essential commodity for building at rates hovering between ₹185-195 per bag. The situation in the entire Telangana, the 29th State to be formed on June 2, is pretty much the same, with prices below the ₹200 mark.

Beyond hope

In slight contrast, prices in the residual State of Andhra Pradesh reign between ₹220 and ₹225 per bag.

The high points are concentrated around candidate cities thrown up as potential capital, including Vijayawad, Guntur, Visakhapatnam, Ongole, and Kurnool.

In December last year prices ruled at a high of ₹270-275 per bag.

Then came the two-month phase of intense political activity over the bifurcation of the State. Along with all other activity, the prospects of the cement industry only continued to slide.

“In the last three years, not much was expected due to the economic slowdown; so, the operation levels of plants were maintained at 50 per cent, albeit with healthy prices. But in the last few months, prices too have fallen by 50 per cent, hitting the companies hard financially,”said an industry expert.

A growth in demand is beyond hope at present, , was the sentiment expressed by companies thatBusiness Line spoke to.

Near term issues

The situation has turned challenging in the near term. Right at the time when the demand for cement picks up (in summer), the State is set for simultaneous elections to the Assembly and Parliament.

With the State under President’s rule and the political atmosphere not clear the industry is keeping its fingers crossed.

Andhra Pradesh is among the biggest producers of cement in India.

It has been a huge consumer, with large irrigation projects (Jalayagnam), housing (Rajiv Swagruha) and real estate buoyancy. Since 2010, with the general economic slowdown, these projects were starved of funds .

Then came the power crisis, which directly impacted an industry with an installed capacity of 55 million tonnes .