Chinese Cement Maker Building $96M Plant In South Africa

Chinese Cement Maker Building $96M Plant In South Africa

One of the world’s top-five cement makers, China’s Jidong Development Group plans to build a US$96-million cement plant in Limpopo province, South Africa, with a 1-million tonne per year capacity, SouthAfrica.info reports.

Rapid infrastructure growth in South Africa and its neighbors will boost the region’s cement industry, market researchers Frost & Sullivan predicted in a September study, “Southern African Cement Industry Production and Investment Forecasts.”

They estimate US$940 million will be invested in the cement industries of South Africa, Zambia and Zimbabwe between 2013 and 2018.

Bank of China Johannesburg and Nedbank Capital said Monday they’d raised R1.1-billion to fund Mamba Cement, the company that will build and operate the plant at a limestone deposit near Northam in Limpopo.

In addition to the loan, equity will be provided by Jidong Development Group — majority shareholder in Mamba Cement, the China-Africa Development Fund, and South African investment and operating group Women Investment Portfolio Holdings (Wiphold).

Mamba Cement will have a transportation advantage because it’s close to major cement demand centers of Johannesburg, Pretoria, Mpumalanga, Rustenburg and Brits, Nedbank Capital said in a statement.

The investment is expected to create jobs, support local schools and result in improved basic infrastructure such as power and roads, which will benefit
adjacent communities.

This isn’t the first new entry into South Africa’s cement industry this year. Nigerian-backed Sephaku Cement completed a new plant in North West province with a 2.5-million-tonne annual capacity, according to SouthAfrica.info.

Sephaku Cement was the first cement production company to open its own new plant in South Africa since 1934, challenging established local producers AfriSam, NPC, PPC, and French multinational Lafarge.

Cement production will be instrumental to government spending, according to Frost & Sullivan. This is especially true for the Regional Infrastructure Development Master Plan which the Southern African Development Community (SADC) aims to roll out over the next 15 years.

The South African government alone is planning to spend more than 4 trillion rand on a massive infrastructure drive in the coming years focusing on energy, water, rail and road.