Limak Group Accelerates Its Investments in Sub-Saharan Africa

The economic volume of Sub-Saharan Africa has grown 4 times since 2000. The continent, which has the highest growth rate expectation with an average of 6% economic growth between the years 2014-2030 among the world economies; In 24 countries in the region, this ratio is expected to be above 5% in the 2013-2030 projection.

According to AICD, 93 billion USD investment is required between 2010 and 2020 to close the infrastructure gap between Africa and developing countries. In this continent, South Africa is the only country with the infrastructure level or above of the developing countries.

On the other hand, from the World Bank data, we see that the electrification rate is below 50% in all Sub-Saharan Countries except South Africa and Ghana, and the damage caused by the energy deficit to economic growth is around 3%. By 2035, the region’s fuel-based electricity generation should double its current rate (0.65 trillion kWh).

The region has reserves that can meet the energy needs of the entire continent, with 8 trillion m³ natural gas and 75 billion barrels of oil reserves. This reserve and need correlation is an important indicator of the volume of opportunities.

Apart from this, the countries of the region started to implement private sector concessions for both ports and airports. Low container capacity and inefficient operation at ports point to strong growth opportunities in these sectors. The highway and rail are still among the growing requirements of the growing region’s economy, although they are still difficult to finance as PPPs.

Today, almost every country in the region is aware that the said infrastructure and energy deficit can only be met with the participation of the private sector, and they are rapidly developing their legislation for this purpose.

Another rapidly developing industry of the region is the Cement Sector, especially in parallel with the increasing infrastructure investments and the developing income level. The production volume of the sector has increased by 300% in the last 10 years. However, the region’s population, which was 856 million in 2010, is expected to reach 1.2 billion in 2025, and the region’s share of the world’s population, which is 6% today, is expected to increase to 16% in 2050.

On the other hand, it is another important indicator that the urban population in the region, which is 37% on average today, will increase to 55% on average in 2050. All these indicators, when combined with the high economic growth expected in the long term, clearly show that the region will be one of the largest global markets for cement consumption in the medium term. While the world average per capita Cement consumption is 513 kg today, this rate is still below 100 kg in Sub-Saharan Africa.

Although new capacities are put into use rapidly, it is expected that the consumption, which was 85 million tons in 2013, will increase to 115 million tons in 2018 and the price trend will increase accordingly.

Limak Group, like many domestic and foreign international companies, has focused on Africa, especially the Sub-Saharan region. Deciding to invest in the Ivory Coast and Mozambique countries, one of which is the gateway to West and the other to East Africa, the Group started its construction in Mozambique in May 2015.

Cement Grinding and Packing facilities will have a cement production capacity of 700,000 tons/year and will be built on an 80,000m² land in Matola Port of the capital Maputo. The facility, which has an investment budget of 40 mio EUR, will be an important cement factory on the coast of the Indian Ocean with the next stage port investment. Limak Group, which will continue its activities in Mozambique and later in East Africa with the LIMAK CIMENTOS SA company, plans to start production in July 2016.

Cement Grinding-Packaging and Ready-Mixed Concrete plant, the construction of which started in Ivory Coast in December 2015, has a production capacity of 1,000,000 tons/year of cement and 1,000,000m³/year of ready-mixed concrete, and is 120,000 meters away from Abidjan, the commercial capital of the country. It is built on an area of ​​m². It is planned to build BIMS Block and Prefabricated construction materials production facilities in the second phase of the facility, which has an investment budget of 58 mio EUR. Limak Group, which will continue its activities in the Ivory Coast and subsequently in West Africa, with the company LİMAK AFRIKA SA, which was established, is planning the facility to start production in the first half of 2017.

Beyond being a Cement Company in this continent, they are the real strengths of the vertical integration structure of the Limak Group, which will keep the growth channels open in the African continent, both organically and through acquisitions.

It is among the targets of the Limak Group, which will make a name for itself in the African market in 2017 with its 2 facilities and 1.7Mt cement production capacity, to realize or purchase a new integrated facility in this continent by 2019.