RWANDA Rwanda

Highlights
  • Successful launch of bulk-delivery service to our construction and concrete product manufacturers’ segments
  • Introduction of premium product (52.5N) to highly refined construction segment
  • Growing market share to 55% in a 4% growth market
  • Domestic sales volumes up 20%
  • 2 million hours without lost-time injury (LTI)
  • Finish mill (FM1) upgrade successfully completed
RWANDA
Product range

CIMERWA produces:

42.5R, 42.5N and 32.5N Portland Pozzolana cement
CEM I 52.5N, specifically formulated for highly refined construction segment
PPC Cement

Company and project overview

CIMERWA (51% owned) is the market leader and only integrated cement producer in Rwanda, with a well-established brand. Established in 1984, its production plant is in Bugarama, Rusizi district, in the southern region bordering the DRC and Burundi.

Two years ago, CIMERWA commissioned a technologically advanced 600 000tpa cement production plant in Bugarama. Post-commissioning and ramp-up, processes have been optimised in line with growing volumes, and production capacity utilisation is expected to rise from 65% to 80% by mid-2018.

In the review period, CIMERWA received ISO 9001:2015 QMS certification from the Rwanda Standards Board.

Review

Since commissioning the new plant in 2015, when CIMERWA held 21% of the market, it has increased its market share to 55% by year-end. This growth came on the back of increased domestic infrastructure delivery with bulk cement sales and higher export sales volumes. CIMERWA's domestic sales volumes rose 20% year on year, while export volumes were 17% above plan, particularly to eastern DRC. However, ongoing political uncertainty in neighbouring Burundi means opportunities to exploit this key market have not yet materialised.

Volume growth was supported by implementing an innovative and adaptive route-to-market strategy, which includes initiatives to improve customer value-added service and reduce logistics costs by developing transport capacity in Rwanda.

Despite some reliability issues with critical equipment in the plant (typical of ramp-up phase) and power-supply interruptions late in the review period, overall plant performance was satisfactory. Further improvements are expected once all plant maintenance and upgrade initiatives have been completed.

Emissions during the period were maintained below specification limits in compliance with permit conditions. CIMERWA also made good progress towards world-class safety standards. Through focused initiatives that include employee training and awareness, equipment redesign and engineering controls, the factory has exceeded 2 million hours (some 370 days) without an lost-time injury.

CIMERWA has revitalised its high-performance culture to enhance commitment to achieving company objectives that benefit internal stakeholders. This included setting performance targets and identifying the skills employees need to achieve high-performance standards. This process also helped CIMERWA systematically refine processes that entrenched a new work ethic to enhance its competitive advantage locally and in the region.

Internally, the organisational structure was reviewed to support successful execution of the business strategy and achieve a high level of localisation in 2020. Growing human capital and local talent remain a priority to advance the development of key technical skills and entrench its position in the region.

To develop secondary businesses in Rwanda, CIMERWA continued to support empowerment initiatives focused on creating small and medium enterprises (SMEs) (ie a tailoring business that manufactures overalls and carpentry that supplies furniture to the plant and village). These initiatives are aligned with the company's strategy to empower local communities and develop secondary businesses that complement our business and the needs of local communities.

Outlook

The Rwanda economy is projected to grow by 6,8% in 2018, supported by improvement in the agriculture sector. Against expectations of higher international mineral prices and accelerating domestic production, cement growth in 2019 is forecast at 8,5% and to remain above 9% for the next five years. Public infrastructure investment will continue to stimulate cement demand, particularly transport, rail and road infrastructure projects. As example, the US$418 million first phase of Bugesera airport will have capacity to handle 1,7 million passengers a year and is expected to be complete by 2019. Other notable projects include the 80MW peat power plant and massive affordable housing projects (to accommodate a growing middle class) using precast concrete technologies.

Recent major maintenance and upgrades will help CIMERWA's plant reach full capacity in the next 18 months. In addition, the plant is well located to supply cement to Rwanda, eastern DRC and Burundi.

Aligned with projected growth in domestic volumes, specifically geared to infrastructure delivery, in March 2018 CIMERWA completed the first phase of its operational maintenance and upgrade programme, focused on milling capacity. This will be followed by the second and last phase from April 2018, concentrating on the pyro-process section of the plant. This upgrade will improve plant reliability and operational efficiency, making CIMERWA more competitive in the market.

Overall, the outlook for the broader cement sector in Rwanda is positive, supported by government initiatives to promote the consumption of Rwanda-made products, protect the local currency and reduce the trade deficit.

Exports to the region and procuring local products and services, where possible, remain a key focus and strategic response to CIMERWA's foreign currency exposure. The company's priority is to increase volumes to optimise plant capacity utilisation and generate returns on shareholders' investments. It will also consider entering new markets and finding new distribution channels, as well as offering value-added services and solutions across all segments.

Cement product range
CIMERWA Limitada – cement plant

CIMERWA produces 42.5R, 42.5N and 32.5N Portland Pozzolana cement. It recently introduced its premium product, CEM I 52.5N, specifically formulated for highly refined construction segments.

Value creation

Recent plant maintenance and upgrades will facilitate the use of alternative fuels and reduce electrical energy consumption. Localised procurement and optimised inbound/outbound logistics are expected to improve market competitiveness and grow secondary businesses. We will continue to focus on increasing localisation of input materials to preserve foreign currency.

Community development, advancement and empowerment initiatives have had a significant impact on the neighbouring community. CIMERWA remains committed to building strong partnerships with leaders and local community members to improve living conditions and quality of life.

The exposure to the training and development programme for the CIMERWA team, both in-country and in collaboration with PPC Zimbabwe, has been well received. Benefits are already evident in a higher level of localisation at supervisory and foreman level. To support this drive and enhance technical engineering skills, conversion of a workshop into a technical training centre is well advanced.