AfriSam plant planned for Western Cape

South Africa: AfriSam has announced that, notwithstanding the weak state of South Africa's construction industry, it is resuming its plans for a USD 320.4m integrated cement plant in the Saldanha Bay area to meet future demand.

The country's cement industry is reeling from four years of consecutive declines and has been hit hard by the lull that has followed the completion of large projects related to the 2010 Football World Cup. A seriously depressed housing market started its slide in late 2007 and was further battered by the effects of the global economic downturn.

Despite all of these problems, AfriSam said that it wanted to take advantage of its large limestone deposit near Saldanha and improve market penetration in the Western Cape. With continued population growth and the need for housing and infrastructure, there are indications that the local market will benefit from the presence of an additional cement supplier, according to company CEO Stephan Olivier.

AfriSam says that the proposed Saldanha project will commence with the expansion of its nearby limestone quarry and construction of a cement grinding and packing plant at a cost of about USD 87.4m. Ultimately, an integrated plant will be built alongside at a further cost of about USD 233m.

AfriSam also says the proximity of Saldanha's deep water port will facilitate exports, which will enable the plant to be scaled-up to achieve improved environmental and production efficiency. "We are seeking approval (to build the plant) by means of an environmental impact assessment," said Olivier.

Other cement producers are reportedly bemused by the news, especially because AfriSam intends to construct its new plant in a province that has seen building and construction demand fall by 50% since mid-2007. Anton Weavind, CEO of Conticem said "I know that AfriSam needs to expand but the worst place they could possible do this is in the Western Cape. There is not much money in exporting cement."