Dec 2012 Sephaku Cement on Schedule to Start Production in December 2013
Cement producer Sephaku Cement has put out a tender for a logistics provider for its projects, which are expected to start producing in December next year, with transport tenders comprising between 300 and 400 trucks expected to be awarded in March, CEO Pieter Fourie tells Mining Weekly.
Sephaku Cement’s projects include the 1.2-million-ton-a-year Aganang cement production facility near Lichtenburg, in the North West, and a 1.4-million-ton-a-year grinding facility in Delmas.
“We are confident that we will complete the projects within budget and it is important to note that the budget of R3.2-billion is still the same one we went to the market with in 2008, the only difference being that we managed to build a 6 000 t/d plant instead of a 5 000 t/d plant as had originally been planned,” he says.
In 2013, Sephaku Cement will focus on the installation of large pieces of equipment, operational preparedness and commissioning, Fourie says.
“Commissioning will start in June next year. It will be a sequential process with different production phases having to be commissioned,” he states.
Commissioning is expected to be completed by November next year; however, after production has started there will be another three-month test period during which the guaranteed outputs, such as fuel consumption, emissions and coal consumption, will be evaluated, Fourie explains.
Ensuring operational prepared- ness includes the recruitment and training of new staff and about 200 skilled workers will be appointed in the second half of 2013. Further, Sephaku Cement will enter the cement market in the second half of 2013. “While we will only start to produce cement at the end of next year, we will start interfacing with customers in the second half of the year,” he says.
Meanwhile, Fourie states that Sephaku Cement is positive about the market as 2012 has been the first growth year in cement demand since 2007. There is also an improvement in residential activity, which is the main driver of cement demand and, therefore, the company is confident that, when it begins production, the market will be on an upward trend.
Sephaku Cement’s short- to medium-term target is to become the most efficient and lowest-cost producer of cement in South Africa, while its long-term target must be viewed in the context of the growth strategy of its majority shareholder, African cement producer Dangote Cement, Fourie says.
“Dangote Cement has ambitious targets to expand into 13 African countries and Sephaku Cement will certainly be a part of that growth strategy,” he explains. Sephaku Cement plans to have a second cement plant operational within the next five years. The company announced in April 2011 the establishment of a 3 000 t/d clinker and cement production facility near Dwaalboom, in Limpopo. Construction on this plant is expected to start once the Aganang facility moves into production.
HIGHLIGHTS FOR 2012
According to Fourie, Sephaku Cement’s biggest highlight for the year was finalising the R1.95-billion debt funding for its projects. South African banks Standard Bank and Nedbank jointly funded the debt requirements of Sephaku Cement in a ten-year deal. “This deal was the last step in securing a fully funded project – it brings closure to a five-year-long fundraising effort and elimi- nates any doubt there could still be about our entrance into the market,” he says.
The fact that two of the largest banks in South Africa are willing to support the project financially indicates its robust viability and brings confidence on a broader industrial basis that private- sector investment is moving forward again, he adds.
Meanwhile, the support for these projects reflects confidence in the infrastructure development programme of South Africa and indicates that the country is ready to move into its next growth phase, Fourie says.
Another highlight is Sephaku Cement’s substantial progress in the construction of its projects.
“In 2012, we completed excavations of about 400 000 m3 for foundations, of which 50% was blasted, and we poured 70 000 m3 of concrete on the two sites.”
Sephaku Cement’s third highlight for the year was the arrival of the kiln at the Aganang site in October.
Written by: Leandi Kolver Edited by: Martin Zhuwakinyu 14th December 2012