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Sephaku lists

21 August 2009

Publication: Moneyweb
Author: Reuters

South African diversified mining exploration firm Sephaku Holdings unveiled plans to build a new cement plant on Friday, its first day on Johannesburg’s main board, where it debuted at 7.50 rand per share.

Sephaku Chief Executive Officer Neil Crafford-Lazarus told reporters that the company was in the advanced stage of planning the cement plant, which would have a capacity of 2.1 million tons per year once it reached full production in the second quarter of 2012.

Crafford-Lazarus said Sephaku was in talks with South African, Chinese and European financiers to fund the plant.

“We have raised 420 million rands and we are currently discussing with specific investors to raise 800 million for our cement business,” he said.

“We are not going to place any shares on the market (to finance the project).”

The cement plant will produce at 30 percent capacity by 2011 and then will ramp up to 2.1 million tons, which would give it a 16 percent share of South Africa’s cement business.

Crafford-Lazarus said Sephaku China’s Sinoma unit would build the plant over 21 months and would begin construciton once financing had been settled.

“We see our cement business as a proxy for our other commodities. We … believe we have a strong core competence in bringing assets up the value curve,” Crafford-Lazarus said.

Sephaku holds 80 percent of Sephaku Cement, which will be diluted by listing on the bourse to 55 percent valued at 1.9 billion rand.

The company also holds 100 percent in the Fluorspar project, 30 percent in Taung, which holds properties in the Free State goldfields, and 26 percent interest in African Nickel Holdings. The company also has a number of mining prospecting rights.

Sephaku, which also has interests in limestone, coal and tin, is the first miner to list in Johannesburg this year.

Sephaku debut share price gave it a market capitalisation of 1.1 billion rand.

South African bourse operator JSE Ltd has said it expected at least four new listings, mainly resource firms, on the main board in the second half of the year, as well as some new companies on the Africa board in the next six months.

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.