West China Cement to gain controlling stake in Ohorongo Cement
Chinese company will buy 100% of Namibian firm's majority owner Schwenk Namibia
West China Cement Limited is buying a majority stake in Namibia's largest cement company, Ohorongo Cement.
The Chinese company will acquire 100% of Schwenk Namibia, which is a subsidiary of Schwenk Zement, based in southwest Germany. The deal is worth US$104 million.
Schwenk Namibia in turn owns a 70% stake in Ohorongo Cement. The remaining 30% is owned by Development Bank of Namibia, South Africa's Industrial Development Cooperation, and the Development Bank of Southern Africa.
West China Cement is one of the largest cement producers in western China's Shaanxi Province, and has its headquarters in Xian.
Ohorongo Cement is situated in Otavi in the northern part of the country. The Ohorongo plant was built by ThyssenKrupp in 2010 with finance from the European Investment Bank, which lent 82 million euros (US$91.29 million) towards the 250-million-euro project.
Ohorongo Cement is a supplier to both the Namibian and Angolan markets, but has been under pressure in an oversupplied market.
Construction activity has now fallen back following a construction boom, while the entry of a company which is partly-Chinese owned, Whale Rock Cement, has added to the competitive pressure.
Whale Rock imports large volumes of clinker from Egypt and China, while according to Schwenk it has a more local value chain.
Schwenk tried to sell out of Ohorongo last year, but the agreed sale to Singapore Stock Exchange-listed International Cement Group (ICG) was not cleared by the Singaporean authorities.
14 Jan 2020