Cheetah runs out of cement

Cheetah runs out of cement
Published: 04 September 2006

Cheetah Cement, Namibia has run out of cement and Holcim is reportedly having a field day. It just pushed up its price for cement to about N$49 per bag. The ship with the cement consignment which Cheetah Cement expected from Brazil two months ago is still yet to dock at the Walvis Bay port, the company’s CEO, Zedekias Gowaseb, told the Namibian Economist this week. 
Cheetah Cement is a joint venture company between the Brazilian company CP Cemento and a Namibian concern, Whale Rock. The company which plans to build its own cement factory at Otjiwarongo, has been having problems since it started with operations late last year. Some of the mistakes that Cheetah Cement made was to import between 14,000t and 15,000t in two successive months which created a surplus of cement in the local market. At that stage, Namibia’s monthly consumption of 25,000t was already fully supplied by Holcim. This resulted in Cheetah Cement sitting on a stockpile of 36000t of cement at its warehouse in Walvis Bay. 

The cement imported from Brazil is both ISO 9001:2000 certified and EN 197-1 compliant. The factory is expected also to meet these standard requirements. 
To defend its market, Holcim launched a massive campaign, which began with adverts in all local newspapers. It was later to be followed by lower prices, as low as N$26 per bag of cement, which was generally viewed as below break-even. Profitable levels were not in sight as the newcomer fought it out with the established supplier. Cheetah Cement had to rope in the government for help. And the rain season did not help matters. The flood in Walvis Bay spoiled more than half of Cheetah’s cement in stock resulting in massive losses. But Gowaseb still maintains that Cheetah Cement will not give up on its dream of constructing a local cement factory in Namibia. When the construction of the factory will start is still hazy at this point. 

It is envisaged that the factory, once completed, will produce between 500,000t and 600,000t of cement per annum. Namibia’s current market volume is estimated at 270,000t per annum. Namibia’s first, cement factory was abandoned more than ten years ago after it failed to meet industry quality production standards.