Algeria's cement segment is expanding production

Algeria expects to meet domestic demand for cement from its own production by the end of 2016 with the completion of a number of new plants and the expansion of existing facilities. The country currently has a production capacity of 21m tonnes of cement per year, requiring the import of around 5m tonnes to meet local demand, which is estimated at around 26m tonnes. Cement imports cost the country €458.1m in 2014, up 28.4% compared to 2013, but imports are now falling as a result of efforts by the government to encourage the use of locally manufactured products.

Falling Imports

Property developers with projects that are part or wholly financed by the state are required, since the end of 2014, to use locally produced building materials rather than imported products if the materials produced domestically are of an equivalent quality. As a result, the value and volume of cement imports has declined, according to figures published in September 2015 by the Customs’ National Centre of Information and Statistics. In the first seven months of 2015, the value of cement imports declined by 13.03% to €278.3m compared to €314.8m for the same period in 2014 and by 4.43% in volume terms from 3.83m tonnes in 2014 to 3.66m tonnes in 2015.

Production Jump

State-owned Groupe Industriel des Ciments d’Algérie (GICA), the country’s dominant cement producer, announced in October 2015 it is to invest AD154bn (€1.4bn) to increase its production by 38% from 11.5m tonnes per annum (tpa) to 18.5m tpa by the end of 2017. Expansion of its two existing plants at Ain El Kebira and Chlef will allow the group to reach a production capacity of 15.5m tpa by the end of 2016. Construction of a second line at its Ain El Kebira plant, north of Sétif, by Orascom Construction, will triple the plant’s production from 1m tpa to 3m tpa when completed at the end of 2016. Production at Chlef will, meanwhile, be doubled to 4m tpa. GICA also plans to start production by the end of 2017 at two new plants in the provinces of Oum El Bouaghi and Bechar. The future plant of Oum El Bouaghi, which will produce 2m tpa, will be owned in partnership with state-owned construction giant Cosider. The new plant of Bechar, which will have a production capacity of 1m tpa, will be owned solely by GICA. Another cement plant in El Bayadh with annual production of 1m tpa is under negotiation with an unnamed foreign partner.

Private Initiatives

The remaining additional production increase will come from private operators. A new plant in Biskra, which is being developed by Lafarge Algérie in a joint venture with local group Souakri, is scheduled to start-up in 2016. The facility will have a production capacity of 2.7m tpa and will raise the French group’s overall production to over 11m tpa. Lafarge Algérie currently operates two cement works in M’sila and Mascara (Oggaz), with total output of around 8.7m tpa. It also owns, in partnership with GICA, the Meftah cement plant with output of 1m tpa.

The €280m Biskra project is part of a major investment programme by Lafarge Algérie to expand its presence and meet growing demand. Its cement sales rose 8% compared to 2013, according to its 2014 annual report. In November 2015 the company announced it would invest €300m in 2016 in completing the Biskra plant and opening a new research laboratory in Rouiba. White concrete is a key part of its development plan, with the firm seeking to capitalise on its lower production cost and longer lifespan. The company currently produces 1.5m cu metres of concrete per year, and aims to increase this to 3m cu metres by 2018. It is also expanding its distribution network to make cement as well as other building products available to customers nationwide at stable prices.

You have reached the limit of premium articles you can view for free. 

Choose from the options below to purchase print or digital editions of our Reports. You can also purchase a website subscription giving you unlimited access to all of our Reports online for 12 months.

If you have already purchased this Report or have a website subscription, please login to continue.

The Report: Algeria 2015

Construction & Real Estate chapter from The Report: Algeria 2015

The Report: Algeria 2015

The Report

This article is from the Construction & Real Estate chapter of The Report: Algeria 2015. Explore other chapters from this report.