Chilanga to build $100m Zambia cement plant

Lafarge’s Chilanga unit in Zambia will build a US$100m plant in Zambia to meet growing demand for infrastructure by new copper mines, the head of its Zambia unit said on Tuesday.  Ian Coulter, managing director of Chilanga Cement Plc, said the new plant would have a capacity of 750,000t of cement coming on stream in 2008.  Chilanga Cement will also export to the Democratic Republic of the Congo and Burundi and supply cement for the construction of new power stations in Zambia itself, Coulter told Reuters in an interview in Chilanga, a town south of the capital, Lusaka.

"Total investment is estimated (in) excess of $100m over the project period, and various finance options are being looked at," Coulter said, adding that a successful feasibility study had been completed and that Chilanga Cement was now awaiting formal approval from the board of Lafarge in France after getting a go-ahead from management.

"(The) DRC has become the key export market. With the return of peace to the country and growing demand for base metals, local consumption in the DRC is likely to increase. The Burundi market is likely to grow due to reconstruction projects sponsored by international donors," Coulter said.  There is also potential to export to Angola, where massive reconstruction is required after three decades of civil war ended in 2002, he said.  In Zambia, cement demand will rise due to forthcoming major projects, including plans by state power utility Zesco to spend $720m on power stations, he said.

Chilanga Cement operates three existing plants and employs 446 workers.  "Our projections indicate capacity constraints ... by 2008. The production facilities at the Chilanga plant are old and use wet process technology," Coulter said. He also noted that Chilanga Cement’s production would rise to 581,000t of cement in 2005 from 497,000t last year.

Turnover in 2004 was $49.8m with a profit of $10.2m after tax. The company exported 97,000t of cement in 2004, the bulk of it to the Congo, and expects exports to rise to 120,000t this year. Lafarge owns 84.5 percent of the shares in Chilanga Cement, which is listed on the Lusaka Stock Exchange. The balance is held by about 3,000 individual Zambians and by pension funds, according to the exchange. Lafarge operates in 50 countries including Zambia.