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Africa's Rise Prompts Heavy Cement Spending

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Construction of new cement plants is under way in Africa.
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At least nine new cement plants are under way in Africa, where leading producers are expanding capacities to meet growing construction demands on the continent. The work will cost billions of dollars and take several years to complete, but political instability poses risks.

All eyes are on North Africa, where cement demand is expected to boom once new governments review construction sector policies in Egypt, Algeria and Libya.

The rebuilding of Libya is at the top of the regional agenda. However, the region's leading cement firms report sluggish performance—especially in Egypt—due to the political unrest of this year's Arab Spring.

Italy's Italcementi Group, in its third-quarter earnings statement, attributed continued risk to shaky spending policies in the region. “In Egypt, the mood remained uncertain due to the political and social crisis,” it says. "In Morocco, the favorable trend in cement consumption of the first half of the year continued in the third quarter, assisted chiefly by private investment in social building and by the public-works sector."

Led by subsidiaries of two international companies—Paris-based Lafarge and Zurich-based Holcim Group—four cement makers are building new plants in more than 10 countries with a combined capacity of 15 million tonnes per year.

Last August, Lafarge subsidiary Lafarge Cement Wapco Nigeria began producing clinker, or partially finished cement, at its $476-million Lakatabu cement plant, which has a capacity of 2.5 million tonnes per year. It is the first of the four Lafarge projects scheduled to go on line by the end of 2013.

Three other Lafarge subsidiaries, including Nigeria-based Ashaka Cement and Morocco-based Lafarge Zimbabwe and Lafarge Maroc, are building in the region additional plants that will increase the largest global cement maker's capacity by an additional 3.4 million tonnes annually over the next two years.

In Morocco, Holcim Group, the world's second-largest cement producer, is making progress on a new plant with an additional capacity of 1.5 millions tonnes per year through its subsidiary Holcim Maroc. The plant, at Fez, kicked off in 2009 and is expected to be ready in the first quarter of 2012.

Cement Co. of Northern Nigeria, through its subsidiary Sokoto Cement, is expanding capacity by 0.5 million tonnes per year. It is building a second kiln line, costing $146 million, the company says.

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