KHAYAH Cement, one of the country’s cement manufacturers, plans to invest approximately US$25 million in capital expenditure this year, NewsDay Business can report.
The significant investment will focus on a crucial kiln refurbishment project at the cement plant, aimed at enhancing production capacity and boosting sales volumes.
Khayah chief executive officer Innocent Chikwata told this publication in an interview on the sidelines of a plant tour in Harare on Wednesday that the project would address the company’s existing capacity constraints, paving the way for increased efficiency and growth.
“For this year, I think we will be spending in the range of US$25 million or so. What I will call expansion for now is to do that project,” he said.
“That will have natural ways to fix what we have in terms of capacity because we already have a very big mill feeding into it. If we correct that, you will find that naturally we will increase.
“All we want to do is to try and enjoy the capacity that the VCM [vertical cement mill] has and for you to do that, you need to make sure you constantly feed it enough raw materials.”
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Chikwata indicated that the kiln project is crucial for the company to address reliability issues with their current equipment.
He said it would also help to stabilise the company’s cement operations and the wider cement industry by ensuring a reliable supply of raw materials.
The company has already started preparatory work for the project, which is expected to be complete in the second half of 2025.
Chikwata revealed that the company’s current plant utilisation rate is around 60%, stating that the goal is to reach the 70% range by the end of the fourth quarter of 2024.
“For other projects, this might not be the right time to mention them as we will be waiting for board approvals and stuff. Maybe more will be in the chairman’s statement and stuff,” he said.
“What I will say is in terms of plant utilisation. We are pretty much at about 60% and we are trying to aim to close the fourth quarter, maybe in the 70s range. By that, naturally, [we] are pretty much growing our volumes as well.”
He, however, acknowledged the challenge posed by cement imports, which he said was suppressing a bit of what they do.
“The issue of cement imports we cannot ignore. It does affect a lot, especially on our demand. Because what we are currently considering to be doing, we could be doing more. They (cement exports) definitely do play a part in suppressing a bit of what we do,” Chikwata said.
“We continue working with the relevant authorities, being our parent ministry, which is the Industry ministry, to try and see what we can do or what they can do. It is a factor that we cannot necessarily say we can ignore.”
In terms of outlook, the Khayah chief said: “We are seeing a very positive trend. We really want to ride on that wave. I guess for us, it is really drilling down on our core business, continuing producing good quality cement and making sure the market is fed.
“We are seeing the growth in terms of individual house building, the infrastructural projects, so we think we are going to close 2024 quite strong in terms of the third and fourth quarters.”