South Africa’s largest cement firm Pretoria Portland Cement (PPC Ltd) has secured a majority stake in Rwanda’s only cement manufacturer CIMERWA, a development officials say will increase cement supply by up to six times.
From a deal signed in Kigali December 12, 2012, PPC Ltd will pay US$69.4m for a 51 percent stake in CIMERWA. Clare Akamanzi, the CEO of the Rwanda Development Board (RDB) said that with the new deal, cement production will expand by up to six times in the coming years.
The current demand for cement in Rwanda is estimated at 350 000 tons per annum. However, local supply has only struggled to satisfy the demand – which has left prices relatively high due to the more expensive imports.
PPC will increase CIMERWA production from 100,000 tons to 600,000 tons to boost local capacity and exports by 2014, according to the deal.
Pretoria Portland Cement is a leading supplier of cement in S.A with production of 8m tons of cement. “Entry into Rwanda is a vote of confidence,” said RDB’s Clare Akamanzi.
CIMERWA is also in the process of finalizing a US$104 million loan to complete the expansion project.
Meanwhile, in a surprise announcement, the South African firm said it was putting a large amount of money into the Agaciro Development Fund.
Mr Paul Stuiver, the CEO of PPC said: “we have a surprise. PPC will voluntarily contribute USD100,000 to Agaciro Fund. We hope u accept it as our contribution”.
“”The transaction is a further step in our committment to invest in Sub-Saharan Africa and we are confident about Rwanda,” said Mr Stuiver.
The cement giant PPC Ltd is just one of the many South African multinationals that have moved into Rwanda. Top among them is telecom monopoly MTN.
South Africa and Rwanda in October concluded a major investment deal. The idea opened up investment opportunities between the two, to benefit from bilateral trade, with the agricultural industry in Rwanda expected to especially prosper from the new initiative.