More is better: Cement production capacity is being boosted to meet demand

The cement industry experienced a supply shortage in early 2015, as local producers struggled to meet a high demand in cement fuelled by an increasing number of public works and private construction projects. To stabilise the situation, the government allowed local producers to import cement. While this was successful in balancing prices, many sub-par imports made their way into the country. The government has since taken measures to address this challenge. The private sector, for its part, is invested in boosting local production.

Dealing With Imports

The government authorised import of 300,000 tonnes of cement in 2015, with the intent to overcome the shortage emerging earlier that year as a result of growing demand due to expanding public works and construction projects. At a press conference in May 2015, Jean-Claude Brou, minister of industry and mines, said the shortage was estimated at some 150,000 tonnes. Local producers imported cement over the course of three months, starting with 90,000 tonnes in May 2015, followed by 105,000 tonnes in June and July.

While prices stabilised, there was soon a glut of cheap and low-quality imports in Côte d’Ivoire. Speaking to local news portal in April 2016, Khalid Iben Khayat, president of the Association of Cement Producers of Côte d’Ivoire (Association des Producteurs de Ciments de Côte d’Ivoire, APCCI), said, “The most important point is quality control. Inspections are required before ships are loaded and when they arrive. Unfortunately, these vessels can remain a month, two months at sea. The worst thing in terms of quality of cement is humidity, which degrades physical performance.”

To help lobby for better industry protections, the country’s four main cement producers – Société Ivoirienne de Ciments et de Matériaux, Sociétés des Ciments d’Abidjan, Société des Ciments du Sud-Ouest and Ciments d’Afrique (CIMAF) – established the APCCI in September 2015. In April 2016 the four firms proposed that the minimum price of imported cement be increased from $90 to $130 per unit. According to Iben Khayat, who is also director-general of CIMAF, stronger quality control at the borders is also required.

Installed Capacity

At an April 2016 press conference the APCCI stated that in 2015 its members generated CFA180bn (€270m) in turnover, creating 2000 direct and indirect jobs. Their investments totalled CFA23.1bn (€34.7m) in 2015 and CFA30bn (€45m) in 2016, and are expected to reach CFA20bn (€30m) in 2017. The association also said its production capacity stood at 2.99m tonnes per annum (tpa) in 2015 and is expected to grow to 6.3m tpa in 2017, against expected consumption of 4m tpa. Within the APCCI, CIMAF’s Moroccan holding group has committed to doubling its production over the past three years, with its expansion plans being completed in February 2016 after a CFA17bn (€25.5m) investment. The capacity of CIMAF’s cement grinding plant in Yopougon is now 1m tpa, up from 500,000 tpa. The company is currently building a second 1m-tpa plant in San Pedro, for a total of CFA35bn (€52.5m), to be completed in 2017.

New Players

With a large number of projects still in the pipeline, the market has attracted new entrants. Nigerian Dangote Group is investing $200m in the construction of a 3m-tpa-capacity plant, scheduled to be operational in 2018 within the Yopougon Industrial Park in Abidjan. Turkey’s Limak Holding is putting forward $50m with local partner Afrikbat for the construction of a 1m-tpa-capacity cement grinding plant and a 1m-cu-metre, ready-mixed concrete production facility in Abidjan. Another international investor is Ivory Diamond Cement, which, after opening plants in Mali and Niger with the support of the West African Development Bank (WADB), secured a CFA10bn (€15m) loan from the WADB and the Ivorian branch of Nigeria’s United Bank of Africa to install a 500,000-tpa-capacity cement grinding plant in Anyama, on the outskirts of Abidjan. The cost of the project is estimated at CFA16bn (€24m) and capacity can be expanded up to 1m tpa.