Orascom Construction Industries announced that United Cement Company of Nigeria Ltd. (UNICEM) will construct a new greenfield cement plant with an annual production capapcity of 2.5Mt in Nigeria. UNICEM will be 70% owned by Egyptian Cement Company (ECC), a 53.7% owned subsidiary of OCI, and 30% owned Flour Mills of Nigeria Ltd., a well established local cement importer and distributor.
The new plant will be located near the port of Calabar in Cross River State in southeastern Nigeria. UNICEM has signed an enigneering, procurement and construction (EPC) contract with an FLSmidth / OCI Nigeria consortium valued at US$250m for the turnkey construction of the plant.
Construction work is scheduled to beign immediately and be completed in 26 months. The total investment cost for the project is estimated to be US$ 330m which be financed at a ratio of 60:40 debt to equity. Debt will be provided on a project finance basis by a syndication of international banks.
Nigeria is the second largest importer of cement in the world and imported approximately 7 million tons of cement during 2004. Average selling prices of bagged cement exceed US$120 per ton. OCI Chief Executive Officer, Nassef Sawiris commented "our decision to add capacity in the Nigerian market is in line with our corporate strategy to focus on expanding cement manufacturing capacity in key emerging markets that are characterised by large populations, high cement consumption growth and significant economic upside potential.
Upon completion of the new Unicem 2.5Mt plant in Nigeria, the OCI Cement Group will have a total annual production capacity of 22.5Mt including 8Mt of annual production capacity in Egypt, 5Mt in Algeria, 4.5Mt in Kurdistan (Northern Iraq), and 2.2Mt in Pakistan.
