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Johannesburg - Cement maker Pretoria Portland Cement [JSE:PPC] is to buy a 51% stake in Rwanda's sole cement maker Cimerwa for $69.4m, it said on Wednesday.
"This transaction is a further step in our commitment to invest in sub-Saharan Africa and we are very confident about Rwanda," said Paul Stuiver, PPC's chief executive.
Cimerwa‚ situated in south-western Rwanda‚ has been the only cement producer in the country for the past 28 year‚ PPC said on Wednesday.It has a current capacity of 100‚000 ton cement per annum and is constructing a 600‚000 ton per annum expansion that will be commissioned during 2014.
In addition to shareholder equity contributions‚ Cimerwa is in the process of finalising $104m debt financing to complete the expansion project.
Current demand for cement in Rwanda is estimated at 350‚000 ton per annum. Based on Rwandan and the surrounding region's positive economic outlook‚ regional cement demand is projected to increase to 1 million ton during the next decade.
Stuiver added; "Combined with our recent investment in Ethiopia‚ the Cimerwa transaction will increase PPC revenue outside of South Africa to more than 30% by 2015/2016."
