Rwandan government to sell 49% stake at Cimerwa cement company

RWANDA – The Rwandan government has unveiled plans to sell its 49% stake in Cimerwa cement company.

Rwanda’s Prime Minister, Edouard Ngirente, made the announcement saying that the sale will be done through an auction by the end of March although he did not disclose the reason for the sale nor the value of the transaction.

Cimerwa is jointly owned by South Africa’s PPC and the government of Rwanda at 51 and 49% respectively with indications revealing that PPC has not yet expresses intreset in the remaining stake.

“We have asked our partners if they are interested and the timeline is one month. By the end of this month we will auction (the stake),” Ngirente noted.

The company is the largest cement manufacturer in Rwanda has an installed annual production capacity of 600,000 tons.

According to a report by Reuters, demand for cement in Rwanda is quite high due to the numerous construction projects in the country, notably recording a growth in annual demand by 7-8 percent.

PPC’s latest annual report admitted to challenges in 2018 noting that result revenues and profits dipped citing cost high costs of maintenance and production during the shutdown period.

“The Cimerwa results were impacted by the planned upgrade to debottleneck the plant and increase production output. Realized cement prices were at similar levels to last year,” the report read in part.

The firm’s closest rival is the struggling Kigali cement company, a wholly owned subsidiary of Kenya’s ARM cement.

Despite the high demand for cement in the East African region, Cement manufacturers have been struggling due to cheaper imports from large manufacturers as well as tough operating environment.

Rwanda also imports cement from neighbours Uganda and Tanzania.

Data from Rwanda Revenue Authority in 2017 showed that at least 79,573 tonnes of cement was imported from Tanzania while an additional 164,814 tonnes were imported from Uganda.In the past, various companies, including the East African Portland Cement (EAPC), a Kenyan cement firm, have expressed interest in acquiring the government’s stake at the cement company though the negotiations didn’t go to completion.

In the past, various companies, including the East African Portland Cement (EAPC), a Kenyan cement firm, have expressed interest in acquiring the government’s stake at the cement company though the negotiations didn’t go to completion.

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