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.