Cement Industry in Sudan
01 October, 2011
Khartoum, (sudanow.info.sd)- Cement industry is essential in a country like the Sudan which is currently undergoing great social and economic transformations. These necessitate setting up huge development programs in all sectors including the building and construction sector.
Cement importance is attributed to the fact that it is one of the basic industries to which many other industries are associated with and above all else it is associated with the process of urbanization and the Islamic concept of civilization on earth. Consequently, cement industry remains one of the strategic industries as for its importance to the great physical national projects.
Cement is a material of cohesive and adhesive characteristics due to its association with water. These characteristics enable cement to link certain materials such sand, steal and others to becomes one integrated unit. The cement definition also includes any of various calcined mixtures of clay and limestone, usually mixed with water and sand, gravel, etc., to form concrete, that are used as a building material. Cement enables us to make the concrete which is characterized by setting and
hardening due to chemical interactions in presence of water.
Types of cement: -
Ordinary Portland cement.
Natural cement
Super sulphate cement
Expansive cement
Aluminous cement
Cement in Sudan is available at Nahral-Neel, the Red Sea, White Nile, South Kordofan, North Kordofan, Geddarif and Blue Nile State.
The are many factors that boost the Sudanese cement industry including the availability of the crude limestone, used in cement manufacturing, at many areas in Sudan. Studies indicated that the crude cement (limestone) is available at the following areas: –
Northeastern Sudan:at Simit, Durdaib and Maman areas along with the Red Sea coast.
North Sudan:at Kush, Jabel Murad and Atbara (from Damar until Abu Hamad to the west of the Nile).
Central Sudan:Naiver, Sinnar and Jabalian areas.
Western Sudan:El Fasher, Jabel Rashad and Abu Jibaiha.
Sources of the ministry said that cement is an important strategic industry that is directly associated with the rehabilitation and development projects.
The ministry said cement was one of the early industries in the country as it was associated with the establishment of the first development project in field of electricity and irrigation in Sudan, where Makwar cement factory was established mainly to provide the needs for the construction of Sinnar Dam. This was followed by the establishment of Atbara cement factory in 1947 with a production capacity of 400,000 tons and in 1970 Rabek cement factory was established with a production capacity of 100,000 tons.
However, and since the productivity of the two factories did not fulfill the country’s needs, there was almost complete dependency on the cement imports which covered about %85 of the country’s needs. Nevertheless, the locally produced cement’s price was higher in the market as for its high quality.
However, under the declared liberalization policy and the growing demand for the cement product together with failure of the two factories to cope up with this new transformation and failure of the authorities in charge to rehabilitate and modernize the two factories, the government issued a decision fully privatizing Atbara cement factory together with the government’s over %85 shares in Rabek factory to avail the opportunity for the private sector to implement expanded, well-planned and modern projects to fulfill the growing demand for cement under the development and urbanization renaissance witnessed by the country in the past years.
The Ministry of Industry has recently issued a report on the cement industry in the country, reviewing a number of facts.
According to the report, the cement production in Sudan dates back to the last quarter of 2008 when there were two factories producing ordinary Portland cement including Atbara cement factory and the Nile Cement Company in Rabek.
By mid 2008, the new investments started to get into the production circle where the first of those investments was Al-Salam Cement Company with a production capacity of 16000 tones as a pilot production for the last quarter of 2008. The company’s production then jumped to more than double.
By the end of 2010 all the factories under construction were completed and entered the production circle and then their production capacity started to gradually increase despite the stoppage of the old Atbara factory in January 2010 due to deterioration of its machineries and inefficiency of its operation, according to the report.
In contrary, the new Atabar cement factory entered the production circle in February same year while the Nile Cement Factory in Rabek completed its rehabilitation and entered the production circle with a maximum capacity of 1000 tons per day. In May same year Barbar Cement Factory entered the production circle followed by Al-Takamul factory in August and finally Al-Shimal Cement in mid December.
The report further indicated that the total production of the four factories amounted to around 389000 tons during the first quarter of 2010, matter which has not been achieved all during the past ten years until 2008, while their production during the second quarter of the year registered what was equal to the whole production of 2009.
By mid of 2010, the production amounted to 993000 tons, i.e. around 372000 tons more than the production of 2009, with an increase of %60, the report said.
Consequently, the growth in production continued during the second half of the year until the annual production reached about one million tons compared to 621000 tons in 2009, with an increase of %22.2.
Investment in field of cement industry:
Sudan is a wide country enjoying great investment potentialities outside the oil sector, matter which needs taking wide steps in rehabilitation the infrastructure as there is a persisting growth in national economy, expanding the service and accommodation infrastructures and providing an attractive investment atmosphere and high quality production inputs together with a market of satisfactory prices.
According to the report, all the above mentioned requirements have been provided, matter which has attracted great investors to invest in the cement field.
Accordingly, around 40 licenses have been issued during the period 2000- 2010, where the unimplemented projects amounted to about 30 projects representing %75 of the total approved licenses including 12 projects in Nahral-Neel State, 10 of them owned by national investors, one by a Qatari investor and one by a Saudi investor.
However, the report stated that most of these licenses have been issued for more than five years, which indicates that the investors were not serious and that these investors have obtained the quarantines for trade purposes and not for production.
As for the non-operating factories, the report said they were two, including the old Atbara factory which is likely not to resume production soon until its rehabilitated, while the second is in Khartoum State where it stopped production due to lack of funding. There is one more factory under construction in Nahral-Neel State and it has not been completed due to difference between the owner and the implementing trend in addition to lack of funding.
Consumption Size:
The consumption size compared to the production and consumption during the past five years was represented in the displayed amounts in 2006 and which registered 1.858 million tons. This size has jumped to 2.3 million in 2007 and due to the stoppage of cement imports from Egypt, the quantities dropped to 2 million tons in 2008. In 2009 the consumed quantities returned to their normal size of 2007 at a time when the imported cement dominated the market with %85 against %15 for the national production, according to the report.
In 2009, the consumption of the nationally produced cement jumped to %27 against a drop in the consumption of the imported cement from %85 to %73. After the new cement factories have completed their entry in the production circle, the national production of cement has started to increase with a noticeable decrease in the quantities of the imported cement. By the end of 2010, the quantities displayed for consumption amounted to around 3 million tons.
Consequently, the consumption size can be set at about 2 million tons in 2006, 2.3 million in 2009 with an increase of %15, and about three million tons in 2010. In 2011, the consumption size is expected to jump to around 3.2 million tons. It is to be noted that all types of imported cements have disappeared from the market and the nationally produced cement has become dominating.
Prices statues:
The local markets have witnessed noticeable stability in cement prices until the end of 2007. However, during the first quarter of 2008, the prices rose with high percentages where the price of a ton reached one thousand SDGs due to stoppage of importation of the Egyptian cement, which was the main controller of this commodity’s price.
By late 2008 the cement started to enter through other windows in addition to the partial entry of the new factories in the production circle, matter which led to gradual decrease in the cement prices.
During the first quarter of 2009, the prices decreased and stabilized at 575 SDGs for the ton, Khartoum delivery. Since the last quarter of 2010 the national production has become the controller over the internal prices due to the increase in its contribution to covering the consumption size with %72 instead of 515. The major cost components which affect the local cement prices are represented in the moving force, i.e. the fuel and electricity. This moving force represents 535 of the production cost, %15 for production requirements and %6 for the funding cost.
In this respect, the Sudanese Minister of Industry Awad Ahmed Al-Jaz said that the national cement production controls the internal prices due to its contribution to covering the consumption size with %72.
He explained that in response to the directives of the Council of Ministers, the cement production fees have been decreased from %20 to %5, adding that due to this adjustment, the collected fees on the imported ton of cement was set at $40- import fees, %25 additional fee, 510 development fee and %15 Value Added Tax (VAT), thus bringing the total to 21805 SDGs for the ton.
He added that the transport cost from the production areas to the consumption areas has also been reduced besides the locally provision of spare parts to the cement factories.
He further said that the efforts been exerted during 2010 have helped in reaching the stage of self-sufficiency with a consumption rate of 3 million tons per year, matter which led to reduction in the cement prices from one thousand SDGs to 500 SDGs for the ton and then to 380 SDGs- delivery to the consumer, adding that entry of the new factories in the production circle in Nahral-Neel has provided great job opportunities.
As for the problems at the state level, they are represented in the fact that Nahral-Neel State has imposed a thirty Sudanese pound as state fees on the cement ton, while the White Nile State has imposed fifteen pounds. In this respect and to resolve this issue, the Council of Ministers has issued a decision to reduce the state fees on cement to the half. However, Nahral-Neel State has actually reduced the fees from 30 SDGs to 25 SDGs, while the White Nile State is still collecting its same fees.
The issues been resolved also included reduction of the transport cost besides provision of spare parts, production requirements and packing materials together with provision of the cement factories with electricity from the national electricity network.
Cement Status in 2010:
The Minister of Industry Awad Ahmed Al-Jaz has explained that the country is enjoying formidable potentialities in field of cement industry, particularly the crude limestone which is available with high quality and huge reserve at most of Sudan States.
He pointed out that the number of the cement projects in the country has amounted to 7 factories, 5 of them in Nahral-Neel State, one in the White Nile and one in the Gezira State.
He said the investment size these projects amounted to 1.389 billion US Dollars, adding that the total maximum production capacity of the seven operating factories has registered 7.4 million tons annually and that the expected consumption for 2011 is estimated at 3 to 5 million tones.
The minister further said that the ministry’s plan for the cement sector stands on working to increase the local consumption size to more than 3 million and then export the surplus besides resolving the issues relating to the sector through reviving the related sectors to provide direct job opportunities in addition to establishing packing factories to fulfill the needs of the cement factories of packing sacks.
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