Rwandan cement manufacturer CIMERWA Ltd has announced it has sold 51 per cent of its equity to South African cement producer
PPC Ltd for US$69.4 million.
PPC Ltd is the leading supplier of cement in southern Africa with cement manufacturing facilities and milling depots in South Africa, Botswana and Zimbabwe with capacity to produce eight million tons of cement per annum.
Kampeta Sayinzoga, the Ministry of Finance and Finance Permanent Secretary, welcomed the deal saying it comes at a time when the country is experiencing a heavy imbalance of trade due to many imports where cement is a leading item on the list.
She said: “Reducing the balance of payment gap remains one of our key priorities and investments like this are very significant to the cause.”
PPC also produces aggregates, metallurgical-grade lime, burnt dolomite and limestone. In addition to serving its domestic markets, cement and lime are also exported to other African countries.
PPC Ltd's roots date back 120 years to 1892, when it established South Africa's first cement plant. In 2010, PPC Ltd celebrated its centenary as a company listed on the Johannesburg Stock Exchange, joining an extremely small and elite group of listed centenarians, not only in South Africa but worldwide.
CIMERWA Ltd has been in the country for almost 30 years. It has a current capacity of 100,000 tons of cement per annum and is constructing a 600,000-tons per annum plant that will be commissioned during 2014.
The cement company is also in the process of finalising a US$104 million loan to complete the expansion project.
Chief Executive Officer of PPC, Paul Stuiver, said: “This transaction is a further step in our commitment to invest in the sub-Saharan Africa and we are very confident about Rwanda. The CIMERWA plant is located in a challenging but very strategic region in east central Africa, which currently lacks significant cement production capacity.”
The current demand for cement in Rwanda is estimated at 350,000 tons per annum. Based on Rwandan and the Great lakes region's positive economic outlook, regional cement demand is projected to increase to 1 million tons during the next decade.
The chairman of CIMERWA Ltd, Afrique Ramba, said: “We are excited with the PPC business relationship.
“This substantial equity investment is a sign of strong confidence in Rwanda business environment and the social, economic and political progress we are making. CIMERWA is delighted to drive forward Rwanda's goal of private sector led development.”
