Hima Cement, a subsidiary of the French conglomerate Lafarge, has announced it will invest $40 million in a new plant in the eastern Uganda district of Tororo.
The company expects to produce one million metric tonnes of cement annually at the plant, raising its overall output to 1.8 million metric tonnes.
Hima Cement currently serves the western districts of Kasese and Kamwenge. It will be the second cement company to establish a base in Tororo, after Tororo Cement, which is also expanding its capacity to three million tonnes up from 1.9 million tonnes.
CEO Daniel Pettersson said the expansion drive is aimed at meeting the increasing demand for cement and concrete in East Africa.
“We are embarking on several projects, starting with the construction of a grinding station at the end of 2016,” he said.
Uganda is undertaking mega infrastructure projects such as the 183MW hydropower dams at Isimba and the 600MW dam in Karuma. Also in the pipeline is the 800MW Ayago hydropower dam, whose construction is expected to begin next year.
The oil and gas industry is also expected to boost the demand for cement as construction of a refinery, a pipeline and other upstream infrastructure begins.
Last year, domestic demand stood at 2.2 tonnes per annum, compared with a total installed capacity of 2.65 tonnes.
Current and planned local capacity will be sufficient to meet cement needs for the next 10 years according to industry experts. However, there is an inflow of up to 0.1 tonnes of cement from Pakistan, UAE, China and Kenya.
The East African Community has imposed 25 per cent import duty on cement imported from outside the region in order to shield local industries. But industry players say there is a need for additional support such as higher duty rates and legislation that would see all government infrastructure projects buy local cement.
Limestone is the principal raw material in cement production. In Uganda, the remaining viable limestone deposits are in the northeast but the exploration process is complex and costly due to technical and social realities such as land rights.
Hima, which has a mining lease for its operations in Kasese, will also be exploring for the mineral in northeastern Uganda.