Emotions running high in Namibia’s cement industry

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Emotions running high in Namibia’s cement industry

THE SouthernTIMES Mar 19, 2018

    Magreth Nunuhe

    Windhoek – The future of Namibia’s cement industry is hanging in the balance, as the Infant Industry Protection (iip) granted players in the sector has been in limbo for four years now.  

    The situation has led to loopholes in the policy, which have seen newcomers entering the market without having to comply with its provisions.

    IIP is afforded to an infant industry for a period of eight years with the rationale being that while protection is afforded to a newly established industry during the start-up years, the costs would decrease over a period of time to a level where efficient production would be achieved. 

    The latest entrant making a return to the local market is Whale Rock Cement, which through the Cheetah Cement brand, has reportedly imported 40,000 tonnes of cement clinker.

    The company, a joint venture between Chinese and Namibian businessmen, owns a plant situated near Otjiwarongo in the northern part of Namibia.  It has apparently bypassed the value chain requirement, which stipulates that a company that sets up a cement plant in the country must adhere to the IIP policy by going through the full production chain of manufacturing cement in order to add value and protect domestic capacity.

    Some insiders in the Ministry of Industrialisation, Trade and SME Development, with knowledge of Cheetah’s latest activities, said from a policy perspective, Namibia already has limestone, which is needed to produce cement clinker and it does not make sense that a finished product has to be imported from China.

    They said the government has received the complaints made against Cheetah and the situation was apparently being discussed at Cabinet level, after which it would then be forwarded to the Ministry of Mines, for an investigation on whether the cement company is adhering to its mining licence conditions.

    “The company has a mining licence to mine limestone in order to create clinker. What must be investigated is whether the company is bypassing the value chain,” said the official, adding that it is unfair in terms of levelling the playing field that other cement companies are going through the full production process, while others are bypassing the process.

    An expert in cement production explained that the production of clinker takes up to 80 percent of the value-addition process of cement production and all the ingredients needed, such as limestone, shale and iron ore are readily available in Namibia, which makes value addition for cement manufacturing possible here without having to import any product.

    “The main value addition in the full cement process happens in the cement clinker preheating and burning, where the majority of the workforce is employed in that part of cement manufacturing,” said the expert, adding that other components include electricity and fuels, such as wood chips from encroaching bushes, refuse derived from fuel and charcoal, which are all sourced from Namibia, creating additional employment opportunities.

    “The main thing that we want to protect is domestic capacity and also ensure that consumers are not eroded,” said the insider.

    The source charged that Namibia could lose an estimate of R80 million in local beneficiation of cement production as a result of Cheetah Cement, which plans to seemingly import over 100,000 tonnes of clinker from China.

    Value addition is one of Namibia’s ‘Growth at Home’ strategies, highlighting that “whatever raw materials Namibia has, whether minerals, agriculture commodities or any other commodity, local value addition should take place before it is exported”.

    “The importation of clinker is also against the Growth at Home strategy,” said the source.

    Cement clinker is a dark grey nodular material made by heating ground limestone and clay at a temperature of about 1,400-1,500°C. The most important raw materials for the production of cement are limestone, shale and marl.

    After blasting, the limestone, shale or marl rubble are conveyed to the mixing bed where the gravel is mixed with additives such as quartz, sand and iron and then sent to the raw mill where it is dried and ground into a fine powder before being transferred to the pre-heater.

    Then the material is preheated and conveyed to the rotary kiln where it is burned to clinker at high temperatures. The clinker is cooled down and stored in the clinker silo.

    Whale Rock/Cheetah Cement, which completed its facility last year and already started rock blasting in January 2018, has boasted that it would bring a total investment of over R4 billion into Namibia.

    Spokesperson of the factory, Manfred /Uxamb was boasting in earlier media reports that the factory would recruit about 230 local permanent workers and 75 Chinese, but declined to speak to The Southern Times when quizzed on the recent developments at the factory.

    Whale Rock Cement, a joint venture between China’s Asia-Africa Business Management and Whale Rock Cement, was first registered in Namibia as a cement factory in 2004. 

    Approached for comment, Ohorongo Cement’s Managing Director, Hans-Wilhelm Schütte said he did not like to talk about other competitors, but lamented that what was happening to the cement industry in Namibia was not good.

    Nevertheless, he said it was very important for companies in the cement industry to follow the objective of the ‘Growth at Home’ strategy to create value.

    “We have our own people producing (cement). By importing, we don’t achieve the objective,” he maintained.

    Schütte said they want to support the government, but argued that there was an oversupply of 2.5 million tonnes of cement in Namibia, while local consumption is only between 500,000 and 600,000 tonnes of cement.

    “We have a huge challenge and it’s not good,” he said, adding that Namibia seems to be going in the same direction as South Africa in terms of over-supply of cement.

    The Ohorongo Cement plant is located in the Otjozondjupa Region in the northern part of Namibia, some 30 kilometres north of Otavi.

     

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