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Sephaku Cement receives R780m cash injection

2 June 2010

Publication: Engineering News
Author: Loni Prinsloo

Nigerian manufacturing conglomerate Dangot would invest R779-million in South African cement company Sephaku Cement, which would increase its stake to 64%, from 19,8%.

The capital injection followed on Dangot’s initial R350-million investment and would fully fund the equity requirement for the South African company’s R3-billion, 2,2-million-tons-a-year cement project.

Sephaku Cement would build two new cement manufacturing facilities, including: a clinker and cement producing facility named Aganang in North West province and a cement grinding facility at Delmas in Mpumalanga province.

Previously, investment firm Sephaku Holdings announced that it had signed a mandate with Nedbank Capital to raise R1,8-billion in debt financing for the Sephaku Cement project.

Dangote would provide the necessary guarantees for the debt financing; fund any project overruns up to R265-million with a loan on commercial terms; and fund Sephaku Cement’s limestone exploration project in Western Cape and Limpopo province for up to R35-million, also with a loan on commercial terms.

Sephaku Cement CEO Pieter Fourie said that having completed the early works on site, the company was now well positioned to start the main construction on its projects by the end of July, with completion scheduled for the third quarter of 2012.

He commented that Sephaku Cement could become a significant cement producer with adequate funding now in place and at a time when continuing economic recovery would see a resurgence in construction activity and increasing demand for its cement products locally and in the regional markets.

Sephaku Cement is the first new entrant in the South African cement industry since 1934.

Full Financial Analysis


Bodibeng Trading Proprietary Limited

Founded by Mr Gaopalelwe Olebogeng from the Verdwaal Village in the North West province who is the sole managing member of Bodibeng Trading Proprietary Limited. Mr Gaopalelwe has previous experience in plant cleaning that he acquired during his tenure as a plant cleaner at another cement company in Lichtenburg. Bodibeng Trading Proprietary Limited employs 36 employees from the local community and currently has a short-term contract with SepCem which includes mentorship to ensure that it effectively provides the plant cleaning services at Aganang.


Mancamane Trading Enterprise

Mancamane is a black female-owned enterprise that started operating in 2010 as a plant cleaning, construction and mining supply company. Ms Daisy Maseko, a renowned entrepreneur, founded the enterprise in the Delmas area, Mpumalanga province and currently employs 28 permanent staff. SepCem adopted Mancamane into the enterprise development programme in 2014. The company is currently supplying plant cleaning services to the Delmas grinding plant and has demonstrated the ability to grow sustainably.


MM&JK Cleaning Projects Proprietary Limited

In 2014, SepCem contracted the cleaning services of MM&JK Cleaning Projects, an enterprise established in 2013 by Mr Sipho Mazibuko from a village called Springbokpan in the North West province. SepCem identified MM&JK Cleaning Projects as a well-managed enterprise that is appropriately suited to benefit from the programme. In the case of MM&JK, SepCem has partnered with another major industrial organisation to mentor Sipho.

The partner’s role is to assist MM&JK Cleaning Projects with inproving its cleaning skills through training, providing cleaning equipment and required detergents. SepCem’s role is to develop Sipho’s business management skills including cost management, record keeping and negotiation. SepCem is assisting MM&JK to develop a marketing strategy to increase its customer base to reduce the single-customer dependency risk and ensure that the company is sustainable. MM&JK Cleaning Projects currently has a three-year contract with SepCem for general cleaning at Aganang and employs 14 permanent staff.



Millicent’s Enterprise

Millicent’s Enterprise is 100% black female-owned and was founded by Ms Millicent Mahlabe, an entrepreneur from Delmas in the Mpumalanga province. The company was selected for the programme because it has historically demonstrated the ability to supply large contracts but lacks administration skills. Millicent’s has a good reputation and positive track record of being able to cater for large provincial government events.

SepCem secured Millicent’s catering services in 2013 for its canteen at the Delmas plant that provides meals to 150 employees. Millicent’s currently has seven permanent employees and several contract employees who are sourced as and when required.