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Ohorongo dismisses N$5b competitor

Mon, 7 December 2015 17:06
by Charmaine Ngatjiheue
News Flash

Ohorongo Cement Company has dismissed the setting up of a N$5b plant by competitors, African Business Management and Whale Rock Cement as a none entity.

The cement manufacturer is however worried about the powergeneration challenges and drought. Marketing and Communications’ Manager at Ohorongo Cement, Carina Sowden, told The Villager that new market players are the least of their fears adding that, “Competition is always a good thing, as long as the playing fields are level.”

She added that, “Ohorongo can already provide more than double the cement the demand of the Namibian market, the question is raised as to why new investments are not rather focussed on the generation of electricity / energy and the severe drought the country is currently facing.”

She says the company has to date already quashed competition from both the SACU region, Angola and Zambia where there is ample capacity.

“Competition is always a good thing, as long as the playing fields are levelled. Note that the company has always had competition from both within the Southern African Customs Union (SACU) region as well as Angola and Zambia, where there is ample capacity,” she said.

Whale Rock Cement came onto the Namibian market with its Cheetah Cement brand a long time ago, but this led to tough competition with the existing cement suppliers, leading to a price war which drove it out of the market.

The new plant will be situated about 245km from Windhoek, and will be the second cement plant in Namibia after Ohorongo Cement, which produces 500,000t/yr. Sowden told the Villager that Ohorongo will continue to provide products of international quality, coupled with customer service excellence to its clients in Namibia and beyond.

She added that in addition to the company being able to meet local demand, in July 2015 it announced that it invested another N$150 million into a new Composite Cement Plant, including new silo capacity and a packaging line.

“Ohorongo can thus now produce double the entire demand of Namibia, and still absorb additional export volumes. Not only has Ohorongo sufficient capacity, it also caters for all the individual customers’ needs. Firstly, all different types of packaging caters for both the local and export market, which includes 50 kg bags, different sizes of big bags as well as bulk cement. Secondly, Ohorongo is able to produce various other types of consistent high-quality cement to differentiate itself from other cement manufacturers, and more importantly, cater for the needs of its customers as well as for bigger projects. Some examples include the construction of the new container terminal in Walvis Bay, as well as the airport runway and wharf at St. Helena Island,” she stressed.

The new Composite Cement Plant is expected to be completed by early next year (2016), and will have the capacity to meet double the demands of Namibia as well as catering for the individual needs and demands of customers for special projects.

Sowden emphasised that as the Namibian economy is expected to see further growth, Ohorongo has ensured in advance that it has the necessary production capacity to sustainably supply cement volumes for Namibia for the future.

“This includes additional bigger projects that might materialize in future. The high-quality limestone deposits close to the Ohorongo plant has been rated as the best available in Namibia, and will last for more than 300 years,” she noted.

Ohorongo has been operating since 2009, but only commenced production in December 2010. Ever since then, it has been the only cement producing company, especially after the Whale Rock Cement entity went off the market for a while.

Ohorongo being the only cement-producing company in the country would easily be misconstrued for engaging in price manipulation or monopolistic behaviour, as there was no competition at the time.

In addition, Ohorongo is slated to turn out more than 700 000 tons of highquality cement annually for local consumption as well as for export purposes. Sowden reiterated that Infant Industry Protection (IIP) was only implemented in 2012, although the company was operating for three years prior.

“Imported products have been available throughout the period of the inception of IIP. As such, one could not really make the statement that IIP was completely implemented. Over-capacity of cement in neighbouring countries also has an effect on sales within Namibia,” she added.