Inside Financial Markets

Lucky Cement see opportunity in war-torn Congo

Lucky Cement see opportunity in war-torn Congolucky

Pakistan’s largest cement producer Lucky Cement plans to start construction next month on a $240 million factory in Democratic Republic of Congo, an official from the joint venture said on Friday.

The cement project is the second to be announced this month as manufacturers see opportunity in rebuilding the mineral-rich, war-ravaged central African country.

Lucky Cement has a 50-50 agreement with the Rawji Group, a banking firm with decades of experience in Congo, for a company called Nyumba Ya Akiba

“Now’s the time to reconstruct the country which was destroyed by the civil wars,” Sajid Feroze, ┬áchief financial officer, told .

factory – 250 km (155 miles) from the capital Kinshasa – is due to come online in late 2015 and will produce 1.2 million tonnes a year, more than double the current total production in Congo.

The country currently consumes about 15 kg (33 lb) of cement per capita per year, whereas neighbouring Angola uses 300kg and the global average is 400 kg, Feroze said.

“There’s a huge lack of cement and there are lots of projects coming. This country has a huge potential so it’s a big market.”

NYA is not alone in seeing the potential of Congo, a country of 70 million people. South African cement firm PPC Ltd PPCJ.J announced earlier this month it would build a $200 million plant in Congo.

Despite being at the bottom of the United Nations development index, Congo’s dilapidated riverside capital is experiencing a mini construction boom, with half-built tower blocks scattered across downtown.

Demand could be further boosted if plans for major projects, such as a proposed $12 billion Inga III hydro project on the Congo river, get the green light.

The two cement deals show investor faith in a country with vast but largely untapped industrial potential, according to Tom Wilson, head of strategic advisory services at Africa practice.

“Cement producers have been encouraged by positive five-year growth projections for the crucial mining sector…but will face a complicated operating environment that shows few signs of improving,” Wilson said.

Ali Nawaz

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Inside Financial Markets was a joint publication of Pakistan Stock Exchange (PSX)and Society of Technical Analysts Pakistan (STAP)