(South Africa) -- South Africa's cement industry giants, investigated by the Competition Commission for alleged collusive practices, will from 2012 face competition from the biggest new entrant to the sector since 1934.
Plans by Sephaku Cement, part of listed Sephaku Holdings, to establish new cement plants in North West and Mpumalanga gained new impetus yesterday with the announcement it had appointed Nedbank Capital as the mandated lead arranger for more than R1.8 billion in project finance facilities.
The total capital cost of the two planned projects is R3.3bn.
Pieter Fourie, the chief executive of Sephaku Cement, said yesterday that arranging the mandate with Nedbank Capital paved the way for funding of the construction of the company's Aganang project, a cement facility in North West, and the Delmas project, a 1.2 million ton cement milling plant in Mpumalanga.
Fourie said construction of the Aganang and Delmas projects would commence in the next few months, with completion targeted for the third quarter of 2012.
He said the important milestone of arranging the mandate with Nedbank Capital followed a number of significant achievements since the company was founded in 2004.
He said in March last year the company entered into a full turnkey agreement for both the Aganang and Delmas projects with Sinoma International Engineering Company of Beijing, the largest supplier of cement plants worldwide, on a fixed price basis.
Sinoma was responsible for Lafarge South Africa's recent Lichtenburg expansion project.
Fourie said Sephaku Cement in August last year also completed the commissioning of a state-of-the-art 1.2 million-ton fly ash beneficiation plant at the Kendal Power Station in Mpumalanga.
Sephaku Holdings last month confirmed Sephaku Cement was in advanced negotiations with a major global financial institution regarding an equity investment of $40 million (about R300 million) by that institution into Sephaku Cement.
Fourie said that despite tough conditions still prevailing following the global recession, Sephaku Cement was more than ready to take on its new role as one of the leaders in South Africa's cement industry.
"It is indeed rare for a company to enter the market the way we did and we are most grateful to our partners, suppliers and particularly our investors for their confidence and support," he said.
"I must reiterate, however, that our biggest strength is our intellectual capacity.
"We have an excellent contingent of cement professionals with significant experience in all areas of the industry."
The North West cement plant is located between Lichtenburg and Mafikeng and will be adjacent to the plants owned by AfriSam and Lafarge South Africa and close to a plant by owned by Pretoria Portland Cement.
Sephaku Cement said Eskom had committed to supply the required power for the projects and all costs related to the provision of power to the plants has already been paid in full by Sephaku.
Sephaku Holdings' share price was unchanged at R3 on the JSE yesterday.
By: Roy Cokayne
Source:http://www.busrep.co.za/index.php?fArticleId=5382204&fSectionId=561&fSetId=662