March 9, 2019

Rwanda Gives Final Ultimatum to South African Cement Maker PPC CIMERWA

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The South Africans have missed several deadlines. Today, CIMERWA can only produce 400,000tonnes, far below the local demand. Rwanda relies heavily on imports.

Rwandan cement firm CIMERWA owned by South Africa’s largest cement producer Pretoria Portland Cement (PPC Ltd) was Saturday reminded it could be closed if it did not implement agreed terms.

President Paul Kagame, addressing the 16th Government Retreat, said he was “disappointed” with how line-officials had handled CIMERWA, in which PPC controls 51 percent.

“For them they make profits…every loss is on the party of government,” said Kagame. “Is the government investment in CIMERWA meant to absorb the loss made by the company so that [it] makes profit, and then you are not supplying even a-quarter of what is needed in Rwanda?”

Kagame added that “Rwandans get nothing” from CIMERWA.

Apparently, the firm has been telling government to stop all cement imports to give it a monopoly to be able to make money.

The president put it to officials to sell off government stake so the company has 100% control “because they will do better, provide cement and make profit, or they close shop, which is OK with me”.

“Why should should we make lies that we manufacture cement [yet] it is cement that only brings loss to you? What sort of business is that?,” added Kagame.

The South Africans took over CIMERWA majority stake in December 2012 for some $61m. At the time, Cimerwa had production capacity of 100,000 tonnes of cement per annum but demand in Rwanda was 350,000 tonnes.

However, PPC said expansion would be done to raise production capacity to 600,000 tonnes per annum. The extension was to be commissioned in two years.

The South Africans have missed several deadlines. Today, CIMERWA can only produce 400,000tonnes, far below the local demand. Rwanda relies heavily on imports.

It was revealed during the session today that PPC has been given until March to indicate interest in taking 100% stake in CIMERWA. After that, the stake will be put on market.

However, Kagame dismissed the length time it has taken officials to evaluate the full extent of the government’s stake, which he described as “political mathematics”.

Kagame said: “How can you spend months calculating this small industry. All is very clear. If you are making loss, it is clear. Or if you are making profit, it is clear. There is nothing hidden. I dont see why you people spend so much time….I want all similar cases [settled] …minister of industry I want to help you close them down…allow people who want to do good business to do business.”

Trade and Indudtry Minister Soraya Hakuziyaremye said many firms are going down due to “mismanagement, poor planning and lack of competitiveness”, and that a comprehensive review was being done which will among other measures recommend to “close them down”.

She cited the case KINAZI cassava, in southern Rwanda, which she said no investor would be willing to buy it due to its poor financial state. Government plans to restructure it, pump in more cash, and then sell it later after it has become profitable.

For Kagame though, he said, “But for me, time is of essence as well. All these stories you are talking about, what time-frame have we given ourselves?”

Kagame said firms in which government has stake had to either make profit or they are closed.

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