South west African markets in the spotlight

South west African markets in the spotlight
26 November 2010


Newbuild activity in Namibia and Angola is top of this week’s news agenda, with Germany’s Schwenk group set to see completion of its new 0.7Mta integrated Ohorongo works in early 2011. Located in Otavi, northern Namibia, the plant is likely to dominate Namibia’s domestic markets, with sales worth about 400,000tpa, and the balance for export. However, the company has yet to develop any sizeable export facilities in Walvis Bay, the main port and at a distance of over 500km from the plant site.



In what must be a set-back for Ohorongo’s owners, the Namibian Competition Commission (NCC) has just ruled against a proposal that would have allowed South African producer, AfriSam, currently the main supplier of cement into the Namibian market from its plants in neighbouring South Africa, to take over the sales and distribution of all of Ohorongo’s cement. AfriSam, with its Holcim connections, has a past history of exerting undue dominance in the Namibian market and thus the NCC has now effectively curtailed AfriSam from what it notes as “potentially anti-competitive activity at the expense of the consumer.”



This places the Ohorongo management in somewhat of a dilemma in that it will now have to quickly set up its own sales and distribution outlets throughout Namibia to keep pace with a production level of almost 2000tpd, and what’s more, to compete with AfriSam for this 400,000tpa domestic market.

A renewed focus on exports is probably high on the agenda at Ohorongo, with the Walvis Bay terminal likely to be given an immediate priority. Fortunately, this is a deepwater port and over time this new facility could cater for shipment sizes of up to 40,000t, with sales to the adjacent countries of Angola, Democratic Republic of Congo, and even further afield into West Africa. Sales into southern Angola can also be expedited by road from the plant.



The Angolan market has been a prime target for overseas bagged cement imports in recent years, with estimates of around 2Mta coming in from China alone. Whether this will continue at such high levels is debateable, given the spate of new capacity, totalling almost 5Mt and set to come on-stream over the next 2-3 years, including a new 2Mta Chinese plant, the greenfield 1.3Mta FCKS facility, a smaller Brazilian operation and expansion at the two existing works.



One solution would be for Ohorongo to link up quickly with a local new entrant and to develop an appropriate joint sales strategy into this growing domestic market, before overcrowding eventually forces the Angolan government to place certain restrictions on imported cement.
Published under Cement News