Holcim looks at feasibility study for new plant, South Africa

Holcim looks at feasibility study for new plant, South Africa
Published: 25 May 2006

SA’s second-largest cement maker, Holcim, said yesterday it would complete a feasibility study in the second half of this year on a new cement kiln that would cost up to R1,9bn. 
 
PPC Cement, Lafarge and Natal Portland Cement all announced major expansion projects, ranging from about R700m to R1,3bn in the past year as the demand for cement rocketed. 
 
Holcim, a 49%-owned subsidiary of listed construction group Aveng, told the media during a visit to its Dudfield plant in North West that its new kiln, if found to be feasible, would be bigger than those of its competitors as it wanted to optimise economies of scale. 
 
Holcim MD Karl Meissner-Roloff could not say at this stage where the kiln would be situated. Holcim has cement kilns near Lichtenburg in North West Province and near Kimberley in the northern Cape. 

The group intends to import about 80000t more cement and to commence a R400m expansion project at a Johannesburg cement milling facility. This would be a short-term solution to meet market demand that is growing faster than expected. 
 
 A large kiln near Lichtenburg had been out of action for three and a half months for refurbishment. It was recommissioned last week, but would take some time before it was back to full production, said Meissner-Roloff. 
 
Holcim imported 21000 tons of cement from China in December to build up stock ahead of the kiln refurbishment. 
 
The group had expected the market to grow by 6%-8% over the past few months, but it had grown at "8% plus". Meissner-Roloff said the imported cement, which would be sold only at the coast, would be sold at "a very small margin". 
 
Natal Portland Cement said several months ago that it had run out of spare capacity and was importing cement and selling it at a loss. 
 
Holcim said the cement milling plant expansion in Johannesburg would add about 20% to the group’s overall output. The project has not commenced yet.
 
"We hope to kick it off later this year," said Meissner-Roloff. 
 
The company sold about 3.6Mt of the 13Mt of cement sold in SA last year, giving the group a market share in excess of a quarter. 
 
Meanwhile, the company said that North West had turned down an application by the group to start using waste products such as used tyres to fire its Lichtenburg kilns. 
 
Meissner-Roloff said it had been turned down on a "technicality". He said the application had been made only for one kiln. 
 
The group subsequently decided to introduce waste products at a second kiln. The province had wanted to consider one application for both kilns. 
 
 Replacing the coal with waste products as a fuel in kilns would reduce Holcim’s operating costs as well as certain emissions, the company said. Holcim already uses such products as cashew nut shells to fire kilns at its cement making plant in Tanzania.