The battle begins for the control of Mozambique's cement market

Mozambique is in the midst of a cement capacity rise. The country's oldest cement producer, Cimentos de Mocambique is looking to consolidate its lead by expanding its Dondo and Nacala plants. These projects will soon be commissioned. However, there is a new Chinese player on the scene that may have ambitions of taking the number one spot.

According to the Mozambique Competition Regulatory Authority (ARC), the domestic scene currently involves 16 cement producers, but there are only five plants with cement capacities over 0.5Mta. Nine of the country's cement plants are located in the Maputo region where there are abundant reserves of limestone. The country's total clinker capacity is estimated at 3.14Mta and cement capacity is ~8Mta, according to the Global Cement Report, 15th Edition. However, cement demand is only expected to reach 3Mt in 2024.

Huaxin Cement to extend its market lead

Huaxin Cement established its leading position when it agreed to buy InterCement Participações Mozambique assets in 2023. Huaxin Cement's subsidiary, Cimentos de Moçambique, is the dominant player with a total cement production of more than 2.53Mta, but its authority is being challenged by the biggest individual plant, a 1.8Mta integrated works in Bela Vista, owned by West China Cement and SPI.  

Cimentos de Moçambique is looking to widen its advantage by expanding its Dondo plant, in Sofala province, from 1Mta to 1.3Mta. The investment is expected to cost US$60m and is likely to create around 200 new direct jobs in the local community. The project includes the installation of a new kiln line and a new vertical 80tph roller mill as well as a new 120tph bagging machine. The modernisation is planned as part of the company's 100^th anniversary, which is being celebrated this year and is visible on its cement bags.

In addition, Cimentos de Moçambique is converting its 0.23Mta Nacala grinding unit into an integrated plant with a new clinker line. This project began in October 2023 and is scheduled to come on-stream by October this year. The new production line will have a clinker output of 3000tpd and the construction is being carried out by CJIC.

Fernando Barreto, Cimentos de Moçambique’s CEO, said: “the investments in Nacala and Dondo are proof of our commitment to the country’s development and to strengthening our production capacity.” 

Greenfield capacity set to rival Huaxin Cement

The fight for the top player in this market though is expected to swing back in West China Cement's favour when it completes a greenfield plant in Nacala with its Moçambique Dugongo Cimentos subsidiary. The foundation stone was laid on 7 August 2023 with the location being on a 50-acre site in the Ontupaia district, on the outskirts of Nacala port. The group's second plant will cost US$192m and have a cement capacity of 1.8Mta or 600tpd and is scheduled to be completed in July 2025. West China Cement has signed a Memorandum of Understanding with the Mozambique government for this project and also undertook an environmental impact study for a 0.2Mta greenfield grinding plant in Namacurra in 2021. 

The expansion round is expected lead to domestic cement capacity of three times the country's cement demand before the end of the year. While the downward pressure on cement prices may be good news for local citizens and construction firms in the short-term, it provides for more challenging business conditions for the country's cement companies.