CIMAF intent on west African expansion

West Africa has been enjoying a period of high demand growth over the last decade, and this has been accompanied by the largely unrestrained construction of grinding plants along the coastal markets between Senegal to Nigeria. The region's cement industry has been transformed and is evolving to be highly competitive.

With limited limestone, clinker imports have served the flourishing sector, but establishing clinker capacity offers a crucial competitive advantage. One company and a major force in the region, Ciments de l'Afrique (CIMAF), is taking on the challenge.

Triple-headed capex project
Omnium des Industries et de la Promotion Group (OIP) consists of Ciments de l'Atlas (CIMAT), based in Morocco, and Ciments de l'Afrique (CIMAF), which operates in Africa outside of Morocco. CIMAF controls 13 grinding plants in Burkina Faso, Cameroon, Chad, Côte d'Ivoire, Gabon, Ghana, Guinea, Guinea-Bissau, Mali, Mauritania, Republic of the Congo and Togo. CIMAF's total cement capacity is estimated at 8.95Mta.

In May 2021 it was announced that the subsidiaries OIP would receive EUR165m to invest in a greenfield integrated cement plant in Pout, Senegal, plus new capacity at an existing grinding plant in Dio Gare, Mali, as well as an additional grinding capacity to the Tema grinding station in Ghana. 

The three capex projects are being implemented through CIMAF Senegal, CIMAF Ghana and CIMAF Mali, respectively. They are designed to meet the growing cement demand in west Africa and improve CIMAF's competitiveness. The Senegalese project will provide CIMAF with a regional source of clinker and reduce reliance on imports. It is also a bet on the future markets of Senegal and landlocked Mali that relies almost entirely on expensively imported clinker from distant coastal markets.

Total costs for the three projects are estimated at EUR235m, which is being supported by the EUR165m financing package made up of a EUR82.5m A-loan from the International Finance Corporation (IFC) and an advance of EUR82.5m in B1 or parallel loans. The IFC’s advisory team is also exploring the potential of engaging with CIMAF to support the design and implementation of alternative fuel and resource efficiency initiatives with the new capex projects.

CIMAF going head-to-head with the competition
CIMAF has sought to grow organically, by building greenfield plants, rather than through acquisition, and has created a modern, state-of-the-art portfolio of plants in west Africa. CIMAF's main rival for sub-Sharan cement expansion is the Dangote Group. There is also competition from companies like Vicat and Ciments du Sahel in Senegal and Mali, plus CimMetal and HeidelbergCement, all of which have the resources and positions to make west Africa even more competitive.

The latest integrated plant expansion projects in west Africa are mainly centred on Nigeria where Dangote and BUA Cement are adding huge volumes. Burkina Faso, Guinea and Senegal are also expected to see expansion projects while the number of greenfield installations is topped by Ghana and Nigeria which both have four projects under construction. Gambia has two projects cited, while single projects are reported in Burkina Faso, Niger, Guinea, Guinea-Bissau and Côte d'Ivoire, according to ICR's plant database.

This proliferation of capacity will increase competition, but those with reliable and competitive local clinker sources will position themselves for a more sustainable future.