Cement may pave Africa’s road to the future, but will China undercut that, too?

Cement may pave Africa’s road to the future, but will China undercut that, too?
19 August 2010

Cement may lack the luster of diamonds or the geopolitics of oil, but it forms the foundation of what might be Africa’s industrial big bang. Now China is moving in, undercutting African producers.

Les Ciments Du Gabon was for decades the only building material company that the equatorial seaside African country of Gabon ever knew – a national monopoly that churned out some 250,000tpa of cement in beige and blue sacks that transmogrified into Libreville’s skyward-spiraling condos and government ziggurats.

Then came the imports: cement shipments from Cameroon, Kazakhstan, and most of all China. Now, as of this week, Les Ciments’ executives are saying they may close their kilns – for good.

“Chinese cement is sold at a price that doesn’t allow [us] to compete,” Development Director Arthur Meka Me Ndong explained to Bloomberg News.

In Nigeria, Ashaka Cement’s profits shot up 42 per cent in the first half of this year, after nearby Benue’s take more than tripled last year to US$95m. Next year, Nigeria’s cement output is expected to surge by 50 per cent, in part because its biggest conglomerate, Dangote cement is spending US$1.5bn building cement plants from there to Sierra Leone.

Name a nation – Tunisia, Kenya, Egypt, Zambia – and there’s probably a US$100m-plus plant being hastily tossed up. Down South, Cimentos de Mocambique plans to double its output in 2011. Up north, cement exports from Senegal doubled last month.

Cement’s going rate is glorious, too: US$200/tin Togo, a sum like a siren song luring clunky cement ships from their distant ports. Which is partly why the end of days for Africa’s cement mixers may be prefigured by plans in Hong Kong.

The People’s Republic, an industrial presence across Africa, is offloading more and more of its new found cement surplus to distant niche markets like Gabon. While Senegal’s kilns bake to a European Union standard, cheaper if cruddier sacks of Chinese cement are creeping in.

“In 10 years, the Chinese will control the cement market here,” Daniel Camarasa Gimeno, General Manager of Cagicex Global Trade says. “Their quality is bad, but the price is good,” he explained.
Published under Cement News