Nigerian firm in SA cement deal

23 April 2008

Local empowerment company Sephaku Holdings has sold a 45% stake in its cement operations to the Dangote Group, one of Nigeria’s leading industrial conglomerates, with the proceeds of the sale being used to establish a new R3-billion cement manufacturing facility.

Sephaku Cement is a subsidiary of Sephaku Holdings, a black economic empowerment company active in exploration, development and investment in platinum group metals, chrome, limestone, gold, nickel and fluorspar.

The strategic partnership would provide Sephaku Cement with the necessary funding and technical expertise to carry out the construction of their new cement plant without affecting their status as a black owned and controlled company, Sephaku Cement chairman Lelau Mohuba said in a company statement last week.

The foreign investment will help Sephaku achieve its objective of being the first new entrant in the South African cement industry to erect a greenfields manufacturing facility in the country since 1934, the company said, adding that a number of existing local cement plants were inefficient and of uneconomical capacity, with some being in excess of 40 years old.

Sephaku Cement CEO Pieter Fourie said that plans were on track to be in production by mid-2010, with the R3-billion cement plant having a production capacity of some 2.2-million tons per year.

He added that it would be the “most modern cement plant in South Africa, and would set the benchmark for emissions as well as power and energy efficiencies.”

For their part, Dangote Group president Aliko Dangote said that the partnership with Sephaku provided an early entry for the group into the “exciting” South African cement market, with a group of likeminded entrepreneurs.

Working together would provide a win-win solution to delivering cost-effective products at world-class levels of energy efficiency and emissions, he added.

The Dangote Group is a major Nigerian conglomerate, leading the country’s cement market. It recently commissioned two cement plants with a combined capacity of 8 million tons per year.

Dangote Cement also has two import terminals located in Lagos and Port Harcourt, which have production lines to supply cement in 50kg and 1 500 kg bags as well as bulk tankers carrying 35 metric ton loads.

Other Dangote industrial product lines include salt, sugar, flour and pasta.

SAinfo reporter

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