HeidelbergCementAfrica

completed

HeidelbergCement is a global market leader in aggregates, and prominent in the fields of cement, concrete and other downstream activities, making it one of the world’s largest manufacturers of building materials. IFC is considering a corporate investment in HeidelbergCement’s operations in Sub-Saharan Africa, through its holding company Scancem International ANS (the “company”), which would include an equity investment and a loan facility to further improve and develop some of its African operations. The company’s operations include eight clinker cement grinding plants with capacities ranging from 140,000 tons per annum (tpa), to 1.2 million tpa. There is one plant in Benin, Liberia, Sierra Leone and Liberia respectively, and two plants in both Gabon and Ghana. In Gabon there is also a clinker plant producing 300,000 tpa of clinker, while there is an integrated cement plant in Tanzania. The latter facility has three kilns, although only one is currently in operation, having been commissioned in 2009. This kiln has a capacity of 0.83 million tpa of clinker, while the two remaining kilns have a combined capacity of 0.45 million tpa. The company is also considering investing in a new clinker plant to be established in West Africa, with the capacity still to be finalized. The production capacity of all the plants is approximately 6.0 million tpa of cement. Aside from the two grinding plants located in Gabon, which use locally produced clinker to manufacture cement, and the grinding mills in Tanzania which use clinker produced on-site, all the remaining grinding plants import clinker. At the respective facilities, cement is produced by combining clinker with imported gypsum, and limestone that generally originates from local sources. The cement produced is generally used to supply local markets, with a very limited quantity imported from time to time to supplement local production at select facilities.Recent upgrades at the various facilities include the kiln in Tanzania, and cement packaging equipment at several grinding plants. The IFC loan would be used to further improve and replace equipment and support construction of the proposed new clinker plant in West Africa, thereby facilitating market expansion. However, the extent of any increase in capacity will ultimately be reliant on market demand.