Chilanga Cement spends on plant upgrades, Zambia

Chilanga Cement spends on plant upgrades, Zambia
Published: 16 May 2006

Chilanga Cement has spent K54.3bn over the past two years on maintaining its plants, company chairman Muna Hantuba has said.  Reviewing the year ended December 31, 2005 at the company’s annual general meeting last Friday, Hantuba said K27.9bn was spent last year on plant maintenance. 
 
"Capital expenditure to improve and sustain the (wet process) plants was K20.6 billion during the year. The age of the facilities, particularly in Lusaka, requires that maintenance and sustaining capital expenditure continues at the current levels until a new plant is commissioned," he said. 

Chilanga Cement has also announced that a new plant would be built at Chilanga and is envisaged to be operational within the next two years. 

Hantuba added that the company’s turnover last year was K300bn, a trend he described as impressive when considered against a 27 per cent increase in production costs.  This increase was fuelled by high fuel costs, importation of clinker and personnel costs including support for HIV positive employees and an increased allocation in the subsidy that enables employees to buy shares in Chilanga Cement’s parent company Lafarge. 
 
Hantuba said during the year, sales grew by nine per cent to 435,000t against a target of seven per cent. He added that fuelled by increased demand from the Democratic Republic of the Congo (DRC) and Burundi, exports increased by 47 per cent to 143,000t. However, the company was unable to meet all export enquiries due to supply constraints that made management prioritise the domestic market. 
 
Hantuba also stressed the need for a guaranteed source of a major input, coal, for the company to continue operating smoothly. Due to constraints at Maamba Collieries, Chilanga Cement has had to import some coal from Zimbabwe, a factor that pushes up production costs. 
 
During the year, earnings stood at K50.8bn or K254 per share. The company also lost K6.7bn in exchange losses arising from the kwacha’s appreciation.