Lafarge’s Zambia unit building new cement plant

Zambia’s Chilanga Cement Plc, a unit of France’s Lafarge, is building an 800,000tpa plant to boost cement exports to the Great Lakes region and southern Africa, the firm said on Monday.

Chilanga corporate affairs manager Eugene Chungu said the firm, which operates two plants, had raised $120 million to build the plant from its own resources, international lenders and a bond on the Lusaka Stock Exchange, where it is listed.

Chilanga, which is 84.5 per cent owned by Lafarge, now produces 650,000tpa, which will rise by 800,000t in 2008 when the plant is completed, Chungu said.

"We will be pushing up our capacity by 800,000t when our new plant is completed, and we hope to start exporting more cement to the regional markets," he said.

Chungu said Chilanga, which exported 137,000t of cement in 2006, would this year cut exports of cement due to rising local demand, but he gave no further details.

He said the company would begin to export cement to regional markets such as Angola, Mozambique, Namibia and the Democratic Republic of Congo (DRC) once production rises.

Chungu said Chilanga was currently failing to satisfy the local market due to rising construction of houses and offices and the new copper and cobalt mines.

Chilanga’s turnover in 2006 fell to 282.3bn Zambian kwacha (US$66.34m) from 299.9bn Zambian kwacha in 2005.

The firm said in a separate statement that "production constraints, insufficient logistical capacity and the availability of cheaper cement due to a strong kwacha at the start of 2006 resulted in decreased turnover."