Competition is intensifying in the cement sector in Morocco, as existing players gear up for another phase of capacity development. While cement demand cooled in 2012 following double-digit growth the year before, the mid-term outlook is positive, and domestic players are now planning new facilities in a bid to maintain market share.
Ciments de L'Atlas (CIMAT) has confirmed plans to build a third cement plant close to Nador in the north of Morocco as part of its strategy to maintain a 14 per cent share of the Moroccan market.
CIMAT, the independent cement company headed up by the successful real estate developer Anas Sefrioui, entered the Moroccan cement sector in 2010 when the company established 3.2Mta capacity at two sites, Ben Ahmed and Beni Mellal. This transformed the competitive landscape which had previously been dominated by three incumbents, Lafarge Maroc, Ciments du Maroc (Italcementi) and Holcim Maroc.
The new plant at Nador, which will initially consist of one grinding mill followed by a full clinker line in a second phase, also presents a challenge to Spanish group Essentium, which had also planned to build a 2.2Mta integrated plant at Nador. The group recently extended its permit to build this facility, but inaction by the project sponsor has left industry observers doubtful that the plant will go ahead.
Following high double-digit growth in 2011, cement consumption in Morocco fell by 1.6 per cent YoY in 2012 to 15.8Mt. Long-term annual demand is forecast at between 4-5 per cent, implying a market size of around 28Mt by 2025. Current capacity is noted at 23.25Mta, according to ICR Research, and is expected to rise to 28Mta by 2017 once the current expansion plans by the existing players is realised, thereby maintaining a good equilibrium between supply and demand going forward.
So far, Lafarge plans to build a new 1.2Mta plant at Souss in Taroudant province in the South West towards Agadir, a market traditionally dominated by Ciments du Maroc, which operates a facility at nearby Ait Baha, as well as Marrakech and Safi. Ciments du Maroc, on the other hand, will now build a new 1.6Mta integrated plant at Tetouan, traditionally Lafarge territory, by 2016, plus two 0.5Mta grinding stations at Jorf Lasfar and Tangiers.
Elsewhere, Asment de Temara, the Votorantim plant acquired in 2012 from Cimpor, and part-owned by Ciments du Maroc, will build a new 0.8Mta factory at Ain Jemaa. The company has already secured a deposit and received governmental approval.
Ynna Asment, a project backed by Spanish investors, have announced plans to build a 2.2Mta integrated plant at Ouled Sghir in Settai province, but like Essentium, this project is doubtful given the lack of any evidence of progress.