When it comes to “emerging” regions in the global cement industry, Africa stands out as one of the leading options. This is not surprising, considering that the African continent is the youngest in the world, with a population that, according to UN forecasts, will reach 2.5 billion people by 2050, which would represent approximately one in four inhabitants of the planet. This demographic increase of one billion people compared to the current figure will drive a rapid process of urbanization. To meet this growing demand, cement production capacity, which is currently around 350 million tons per year in Africa, will have to be increased considerably.
Amsons Group will cover part of this increase. The company announced this week its plans for a $320 million investment in a 1.6 million ton per year cement production line in Tanzania. They also claimed an investment of $400 million to modernise Bamburi Cement in Kenya, should its existing $180 million bid for the Holcim subsidiary be accepted. According to Tanzanian figures, this investment could be enough to take Bamburi Cement from 1.1 million tons per year to around 3 million tons per year, assuming similar project scope and equipment suppliers.
Founded in 2000, Amsons Group is a Tanzanian conglomerate with a presence in a range of sectors including construction, transport, flour, container yards, cement and concrete. The company currently operates Camel Cement, a grinding plant located in the Mbagala suburb of Dar es Salaam and holds a 65% stake in the Mbeya Integrated Cement Plant, which has an annual production capacity of 1.1 million tons. This plant was acquired from Holcim in September 2023. According to the company, they always focus on local production of materials, with the aim of reducing Tanzania’s dependence on imports. In this context, the construction of a new cement plant aligns perfectly with that strategic vision.
There is currently some positive news for Amsons. In Tanzania, cement production increased by 6.2% to 8 million tons in 2023, according to the country’s Ministry of Industry. This followed a 9.7% increase in the previous year. In the north of the continent, cement consumption rose strongly in Kenya in the second half of 2023, after a less than stellar start to the year. Consumption ended in 2023 around 0.8% higher than the previous year. However, consumption declined in the final quarter. Worse still, the first four months of 2024 (the most recent data available from the Kenya National Bureau of Statistics) saw a 10% decline in cement consumption relative to the same period in 2023, falling to 2.6 million tons/year.
As Africa lacks cement production capacity compared to other regions, it is important to highlight that Amsons’ new plants will have to take on not only existing capacity in East Africa, but also that of countries exporting to the continent. Indeed, this week Pakistan, a long-time agitator for South African cement producers, reported a year-on-year increase in exports for October 2024. Exports rose to 4.36 million tons, up 9% compared to 4 million tons in October 2023. It is also worth noting that Tanzania exported around 1.1 million tons of cement to Rwanda, Burundi, Malawi, the Democratic Republic of Congo and Zambia in 2023. This figure is likely to be higher in 2024, given that Huaxin Cement Tanzania Maweni Company’s 1.3 million ton per year plant in Mavini, which is focused on exports, will be inaugurated in February 2024.
Despite the apparent abundance of capacity and reliance on imports, Amsons Group has decided to invest $900 million. Adding the purchase of Mbeya Cement in 2023 (the amount of which has not been disclosed), the total investment will exceed $1 billion in a few years. The company is betting heavily on becoming “one of the largest cement producers in Kenya and Tanzania by 2030,” according to its managing director, Edha Nahdi. It will certainly be interesting to follow its progress.
Source: https://globalcement.com/news