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Published on July 26th, 2016 | by admin




With cement consumption in Namibia currently standing at roughly 600,000 tonnes per annum, plans for a second cement factory with a 1.5 million tonne annual production capacity raises competition concerns. According to data of the United States Geological Survey, China accounts for about 60 percent of global cement volumes. According to industry estimates for the Southern African Customs Union (SACU), cement demand stood at approximately 15 million tonnes across all five member states (South Africa, Botswana, Lesotho, Namibia and Swaziland). The capacity of all operating cement factories in SACU countries is currently just over 15 million tonnes and will increase to just over 20 million tonnes by 2025. This year will show surplus capacity of seven million tonnes of cement within SACU, according to data accessed by Insight.   Ohorongo Cement in Namibia announced at the end of 2015 that its production capacity has increased to one million tonnes annually. It exports to some African countries and supplied cement for the construction of an airport on the island of St Helena, which is situated in the mid-Atlantic off the coast of Namibia. However, the Angolan market is inaccessible since Angola closed its borders a few years ago to certain cement imports, including from Namibia.


More than ten years ago, in 2004, the company Whale  Rock Cement opened its doors in Namibia. It imported cement from South America, which was branded as Cheetah Cement. At that time Namibia mostly imported cement from South Africa. A local price war ensued. Allegedly in cahoots with the South African cement industry, some Namibian dealers sold the South African cement at very low prices for a while, which resulted in Cheetah Cement being pushed out of the market. Whale Rock Cement tried to bounce back in 2007 and announced plans to build a cement factory north of Otjiwarongo, opposite the site where a South African company had built a cement plant before independence. This plant had become defunct and was eventually dismantled. Whale Rock applied for a mining licence in 2007. Due to a lack of funding the project did not proceed. In October 2015, however, the company announced it had gained Chinese partners and would soon build the factory with an annual capacity of 1.5 million tonnes. It was announced that the investment would be about US$350 million (almost N$5 billion at current exchange rates). And the natural resources on site would be sufficient for 40 years of production, the company said. The  Chinese companies apparently partnering with Whale Rock Cement are Asia & Africa Business Management and Shaanxi Heng Yu Da. Once the factory is constructed within 18 months, Whale Rock Cement intends selling some of its cement in Namibia, while mostly exporting. There are also Chinese cement factories in South Africa and South Africa also imports cement from Pakistan, which displeases local cement manufacturers.


Ohorongo Cement of Germany’s Schwenk group outside Otavi was inaugurated in early 2011. It is Namibia’s only cement factory. All resources required for making cement are sourced from Namibia on site on farm Sandberg. The resource there is apparently sufficient for 400 years of production, according to studies. Almost at the same time as going into production Ohorongo Cement was awarded infant industry protection (IIP). Under IIP, import tariffs are slapped on imported products for a number of years to give local manufacturers an opportunity to grow. In July 2012, the Finance Ministry imposed a 60 percent levy on cement imports, to be reduced to 54 percent by  2015, and lowered each consecutive year until 2018, when the import levy on foreign cement would be reduced to 12 percent. However, a Chinese company in Namibia, Jack’s Trading CC, owned by Yuequan ‘Jack’ Huang, sued the Finance Ministry around the time that Ohorongo was awarded IIP status. Jack’s Trading CC, which imports roughly 200,000 tonnes of cement annually, argued that it had signed a fouryear cement import agreement with an international supplier in 2011 and that the import tariffs would affect it negatively. The High Court found in favour of Jack’s Trading CC on technical grounds and declared Ohorongo’s IIP status to be “of no force and effect”. These technical grounds were that former Finance Minister Saara Kuugongelwa-Amadhila had first announced the import tariffs in the National Assembly and published them in the Government Gazette afterwards, when she should have first gazetted the tariffs before tabling them in parliament. Ohorongo Cement has since lodged an appeal in the Supreme Court. However, four years later and a ruling is still outstanding. As a result, Ohorongo Cement has no IIP status and Jack’s Trading CC is thus importing cement virtually tariff-free.

“There is a suspicion in the construction industry that the judgement might be deliberately delayed until the four-year import contract ends,” a local building contractor told Insight. Huang is reportedly connected to a proposed luxury housing and leisure development on land owned by President Hage Geingob on the eastern outskirts of Windhoek. While the environmental impact assessment (EIA) is still underway, already since end 2015 a water pipeline is being constructed near the Waldorf School at Avis. This is happening while Windhoek is experiencing a severe water shortage and at a recent public hearing on the development residents questioned whether there would be sufficient water for the hundreds of proposed dwellings to be constructed. Fair competition In the meantime, the Environmental Commissioner in the Ministry of Environment and Tourism (MET), has granted Whale Rock Cement cc – trading as Cheetah Cement – an environmental clearance certificate on 17 February this year. It is valid for three years. “The environmental impact assessment (EIA) and the Environmental Management Plan (EMP) submitted is sufficient  as it made adequate provisions for the environmental management concerning the project’s activities,” Environmental Commissioner Theo Nghitila wrote to the company. However, when scrutinising the EIA at the MET, Insight only found a thin document from 2007. The Environmental Management Act of 2007 only came  i n t o forc e at the start of 2012. The MET originally granted a clearance certificate to the company on 8 August 2007. A renewed submission was handed in on 9 December 2015 stating that “no activities were undertaken since 2007 due to a lack of investors”. The company signed a memorandum of understanding in October 2015 with Chinese investor Asian & African Business Management for the N$5 billion factory. Five weeks later the old EIA of 2007 was resubmitted for environmental clearance with an “urgent appeal for renewal”. “It is a bit surprising that with the new Act coming into force in 2012 with strict regulations for EIAs, that  Whale Rock was not requested to do a new EIA altogether when they resubmitted their request last December,” an environmental consultant told Insight. The company applied for a mining licence (ML 146) on 2 February 2007. The Ministry of Mines and Energy granted the licence on 24 August 2007. It expires on 12 August 2022.  Responding to questions about the new competition, Ohorongo Cement stated that it welcomed competition. “It must however be fair,” the company stated. Despite this sanguine approach, it appears that Ohorongo Cement could have quite a fight on its hands in the not too distant future.

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