Investment in Ugandan cement plant at risk due to land acquisition challenges

Investment in Ugandan cement plant at risk due to land acquisition challenges
05 April 2019

Uganda is at risk of losing a US$250m cement plant investment to Kenya due to challenges associated with land acquisition in the country, according to Hima Cement’s Managing Director, Nicolas George.

Mr George said Hima Cement’s parent company LafargeHolcim took a decision to invest US$250m in Uganda, Kenya, Tanzania, Zambia and Zimbabwe. “We have been wondering where to invest money and Uganda was our number one destination but it is likely to lose the opportunity to Kenya where it is easy to acquire land,” Mr George said.

He was appearing before the land probe to explain his company’s role in acquiring surface rights in Mwello Parish in Tororo District. Mwello residents had petitioned the land probe, accusing Hima Cement of buying their communal land from individuals at give-away prices. The company hired Optima mines and minerals to help them acquire surface rights on 29 acres of land in Mwello to extract stones to build their factory in Tororo and supply the SGR railway. Although Hima paid UGX600m (US$161,018) to acquire surface rights from locals and another US$100,000 in fees to Optima mines, it lost the money to clear their image, according to a report in the Daily Monitor.

Mr George said speculators had made Hima’s search for a new plant site difficult for the last seven years, adding that it had tried to start a factory in Moroto but failed. “Whenever we go as Hima, we are confronted by speculators who push land prices 20 times high,” he said. Speculators with exploration licences to limestone deposits earmarked for investment by the company have been a particular thorn in the side of Mr George. “When you go to talk to them they tell you to put down US$2m  before they allow you to carry out tests. I challenge you to find a square mile of land where someone does not have an exploration licence,” he said. Following an internal investigation into the matter, the company had decided to negotiate with the community directly.

Published under Cement News