DR Congo: CIMKO plant nears commerical production

This October the US$270m CIMKO plant owned jointly by Lucky Cement and Groupe Rawji located 240km (150 miles) west of the capital, Kinshasa, will start producing cement and work towards its 1.2Mta cement capacity.

The project has been financed by lenders including the African Development Bank, the International Finance Corporation, Denmark’s Export Credit Agency EKF and by Habib Bank Ltd.

The Democratic Republic of Congo's Prime Minister, Matata Ponyo Mapon, said his government will protect local industry as Lucky Cement Ltd and Groupe Rawji when their plant opens and boosts production four-fold in the central African nation.

"We will take care of everything that can hinder your production, unfair competition, fraudulent imports, we will take care of that, "Matata told CIMKO executives last week. "We are conscious of the support that the government must bring," he said at a 27 Sept meeting that was also attended by the ministers of finance and economy.

Congo produced 398,749t in 2015, according to the central bank and only 114,604t in the 1H16, 41 per cent less than the same period the year before. CIMKO estimates that current cement consumption in Congo is about 1.5Mta, with the rest imported, but is betting that the market should be much bigger.

PPC Ltd, South Africa's biggest cement maker, is also preparing to open a 1Mta factory in the same area as Lucky Cement. Combined, the two facilities can increase Congo’s current output by more than seven times.

When Lucky and Groupe Rawji began construction in 2014, Congo’s economy grew 9.5 per cent, according the central bank, the third-fastest growing economy in the world that year, according to the International Monetary Fund. The collapse in prices for copper, oil and other key exports has since led to a slowdown, with the government in August slashing its growth forecast for 2016 to 4.3 per cent.

The slowdown will have an impact on cement-consumption growth, but the partners are not overly concerned, Khalifa said. Greater domestic production can lower cement prices, currently among the highest in the world, and drive increased demand, according to CIMKO.

"We still do not know the true size of the market because high prices and a lack of production have held back consumption," he said. In Kinshasa, the cost of a 50kg (110lb) bag of cement has risen as high as US$15 in the past three months.