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Sephaku set to enter cement market

9 March 2010

Publication: Business Day
Author: Edward West

SEPHAKU Cement, an 80,2%- held subsidiary of Sephaku Holdings, has appointed Nedbank Capital as lead arranger of the project finance facilities for new cement projects in the North West and Mpumalanga.

Sephaku Cement will be the biggest new entrant in SA’s cement market since 1934, with the total capital cost of two projects at R3,3bn, and project finance facilities likely to exceed R1,8bn.

Sephaku Cement CEO Pieter Fourie said yesterday the arranging mandate paved the way for funding the construction of the company’s Aganang project in North West , and the cement milling plant in Mpumalanga, the Delmas project.

“In March 2009 we entered into a full turnkey agreement for the Aganang and Delmas projects with Sinoma International Engineering Company of Beijing, the largest supplier of cement plants worldwide, on a fixed price basis.

“Five months later we completed the commissioning of a 1,2-million ton Fly Ash beneficiation plant at Kendal power station in Mpumalanga,” Fourie said yesterday.

Sephaku Holdings said on February 1 that it was in advanced negotiations with a global financial institution about an equity investment of about 40m in Sephaku Cement.

“It is indeed rare for a company to enter the market the way we did … our biggest strength is our intellectual capacity. We have an excellent contingent of cement professionals with significant experience in all areas of the industry,” he said.

Fourie said construction of the Aganang and Delmas projects would start in the next few months, with a target completion of the third quarter of 2012.

Sephaku Holdings is a minerals exploration, development and investment company, with a range of mining and exploration projects.

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.