Lafarge to move ahead with US$200m Balaka plant, Malawi

Lafarge to move ahead with US$200m Balaka plant, Malawi
Published: 30 January 2009

Lafarge Cement is to invest US$200m in a new cement plant in the southern Malawi district of Balaka, which, according to the country’s Geological Survey Department, hosts deposits containing several million tonnes of limestone.

Lafarge Malawi chairperson Thom Kanyuka says the company is fast-tracking the project to ensure that cement production starts this year.

He is confident that the project will not be affected by the global financial crisis, which has forced Lafarge to scale back on a number of major projects in Europe and the Americas.

“Lafarge still regards the Malawi project as a priority during this time of the global financial meltdown. Depending on the results of the ongoing analysis [of the Balaka limestone deposit], Lafarge will make an announcement on the size of the plant in the first quarter of 2009.”

He says the envisaged plant will be similar to the one commissioned in Zambia in November 2008, which has the capacity to produce 800,000tpa of cement.

Malawi currently faces a shortage of cement, which has led to the skyrocketing of prices in the former British colony.

The cement shortage has forced the Malawi government to remove restrictions on imports, which had been put in place to protect local cement producers.

The cement shortage is largely the result of a shortage of clinker owing to the economic crisis in Zimbabwe, which has seen clinker producers in that country curtain the volumes they export to Malawian cement producers.

Lafarge has resorted to importing clinker from as far afield as the Far East.

Meanwhile, the government is courting foreign investors to build cement plants in Malawi, which is believed to host limestone deposits in several parts of the country.

“We want new suppliers of cement on the market because we fear the problem of inadequate supplies will affect progress on important construction projects,” says Malawi’s Industry and Trade Minister, Henry Mussa.

In this regard, the Malawi government has signed an agreement with a the People’s Republic of China’s Shanghai Construction, to start cement production in the country.

Mussa says officials from the company "have identified a site in Balaka district and hope to roll out before the end of the year".

"We expect the factory to bring in competition and lower the cost of the commodity on the market.”