Since South Africa’s PPC bought a majority stake in Cimerwa in 2013, the Rwandan company has boosted manufacturing capacity six-fold, from 100,000 to 600,000 tons a year through its brand new state-of-the-art factory, and has been appointed by the government as one of the 15 key companies that would drive the “Made in Rwanda” program.
We are experiencing an Africa Rising momentum in many aspects but particularly in regards to investment. What do you think is making the continent so attractive?
Africa has always been seen as a dark continent, but this is changing quickly. The world is starting to realize that we are less dependent on commodities, and we now focus on our agility to adapt to changes towards technology and Africa’s innovative solutions to move forward. As an example, Rwanda is not a country with an abundance of minerals, yet it is growing at an alarming growth rate, thanks to its innovative initiatives, from its people and government: technology, ICT, etc. Perceptions of Africa are definitely changing and the continent is now seen as a crucial business hub that no one can ignore. Africa has been put to the side for a very long time, without sufficient development, leading to a land with abundance of untapped opportunities.
It is also the youngest continent in the world, which will boast the largest labor force globally. What are the challenges to make all these people productive?
Our challenge is to make sure we can get sufficient investments so we can industrialize. The mineral sector, for instance, suffered quite substantially of the fact that the commodities are exported to be transformed in foreign countries. No value addition was created from our inputs in Rwanda and most of African countries. By industrializing the country, we make sure that our people get developed and employed; we make sure that wealth can be sustained within the country. We want to come to a point where importations can be considered as marginalized feature to drive the economy. We want to be self-sufficient.
What are Rwanda’s integration efforts to tap the regional market?
Africa is definitely waking up now: Rwanda hosted the recent African Union Summit, where countries signed an agreement to issue a single passport for the entire continent. This is the kind of attitude and optimism that will drive Africa as a country. Unnecessary distinctions are made between the African countries, which limits trade and free movement of Africans in their own continent, resulting in a society that has no tolerance amongst each other. How is it possible for Africans to travel easily out of their own continent instead of within it? This can also apply to workforces. Africa’s skills are, generally speaking, concentrated in some countries. With a one Africa passport, Africans will be able to trade easier amongst themselves, leading towards an easier movement of goods. This will make Africa’s grow better than anticipated.
The government is determined to enhance the ease of doing business and attract more investors. How would you describe today’s investment environment?
Rwanda is a very friendly place to do business. In our case, local authorities have been extremely helpful. When we were in construction phase of the plant, Tax import duties favored Cimerwa which made an easier movement of materials to site. The government clearly assists us on the different challenges we are facing. It is key for both the public and private sectors to have a clear goal of what is required from a particular investment. Making sure that investments are successful is crucial for both parties: investors want to benefit from their investments by getting their returns, and the government wants to make sure that the construction of the plant is a success, in turn will attract further future investments for the country. It is a win-win situation. In 2014, the “Made in Rwanda” concept emerged. Since then it has gained a lot of momentum. It allowed the country to reduce its deficit, cement imports contributed tremendously to the country’s forex deficit. With the current exportation of cement to DRC, it is aimed towards supporting the government in the reduction of forex deficit.
PPC bought a majority stake in Cimerwa in 2013. “With the new investor in Cimerwa we expect the factory to perform much better than it did before,” said President Kagame. Since then it has boosted manufacturing capacity six-fold, from 100,000 tons a year to 600,000 a year by the commissioning of a brand new factory. What does this say on the confidence in Rwanda’s market?
The new factory is performing a lot better than the previous plant. Compared to the 100,000-ton plant, the new 600,000-ton cement factory has six times the previous production capacity. The older plant, powered with HFO (Heavy Fuel Oil), was highly inefficient, resulting in high operational costs. PPC Cimerwa’s successful upgrade of the cement plant gives Rwandans the benefit of the new efficient plant. Thanks to the use of new technologies, which is in line with the Vision 2020 of the Rwandan Government, we can operate the plant more efficiently in an environmentally friendly manner.
In that regard, how are you working on carbon footprint reduction?
Our approach is multi-faceted. We are currently running trials with waste materials – agricultural, household, human waste, sludge, gas, to mention a few – as sources of energy and reduce the amount of fossil fuels that we are using in our plants. Cimerwa plant is equipped with bag filters, which entrap most of the particulates that would otherwise be emitted to the environment and recycle these back to the main operation. With high risk of soil erosion around the plant vicinity, we support a tree-planting program; we also have a cooperative called the Environmental Sustainability Women Cooperative, which is playing a key role in soil stabilization at Cimerwa.
“In the absence of Rwanda’s contribution, group revenue would have declined by 5%,” said Darryll Castle, CEO of Pretoria Portland Cement in a statement. What is the role Cimerwa has within PPC and how are you taking advantage of the synergies?
Cimerwa is the recent investment that PPC acquired outside of South Africa as part of its expansion program. The main reason why investors come to us is because we are capable of managing cement plant building projects with success. The Rwandan government partnered with PPC because of the skills that the latter would bring to the country.
Cimerwa is critical to PPC’s proof of success to increase the investor confidence in PPC as a company capable of delivering to the investors’ expectations in new markets, as demonstrated by the successful completion of the new Cimerwa plant. Rwanda’s government took Cimerwa as one of the 15 key companies that would drive the “Made in Rwanda” program. An organization was sent, on behalf of the government, to assess Cimerwa; our success, our challenges and to ensure that the government has a better understanding of the hurdles that make it difficult to trade in Rwanda and in export markets.
I’m soon going to Goma, DRC (Democratic Republic of Congo), with Rwanda Development Board representatives to identify export opportunities. Rwanda understands that for export to flourish, we have to manufacture good quality products. With the government-supported program, through the Rwanda Bureau of Standards, we are in the process of obtaining ISO certification, which will allow Cimerwa to compete at international standards on all environmental, quality and safety aspects. These are the qualities we need to see ourselves aligned to world-class performers.
In the past months Rwanda has made two big announcements, which will have far-reaching implications for cement companies: the Kivuwatt plant and the railway project to Dar Es Salam. As energy and transport are the first and second-highest cost components for cement manufacturers, how do you expect these projects will benefit Cimerwa?
I think Cimerwa can benefit both in the short-term, by being a provider to the projects, as well as in the long-term, as a user and beneficiary of both projects.
Cimerwa cement is known and trusted in Rwanda for the past 30 years of its existence and prides itself with the constantly high quality cement and exceptional customer service. We are always willing to assist, always striving to exceed expectations in service, delivering and products.
The cement business is highly competitive, we are confident that we are able to provide the quality of cement required by these projects. Finally, one of our main competitive advantages in Rwanda is the “Made in Rwanda” campaign, which promotes consumption of locally produced products; it will assist in growing local business, but also help to improve investor confidence to invest in Rwanda. Once completed, Cimerwa will benefit from both projects as we will be able to access to a reliable and potentially cheaper source of energy. We are actively seeking for new opportunities within the region.
Cimerwa sales volume exceeded 100,000 tons in February. Further sales, marketing, and distribution efforts are expected to improve this figure. How are you reinforcing your strategy to increase sales?
We are implementing our marketing strategy through different communication channels, such as bus stops, radios, POS and various adverts. In some way we would like to paint Rwanda blue, in reference to our logo. We also showcased our expertise during an international expo running from 27 July to 10 August 2016. This will be in line with the government’s “Made in Rwanda” campaign, which will take place for several months in major cities of Rwanda and will be led by the Minister of Trade Hon. Francois Kanimba. We are historically not known in the eastern part of Rwanda, and we should not take for granted that the entire country knows us. We have to be present in all minds, with an aggressive communication campaign.
Cimerwa is a responsible company giving back to society, contributing to educational, health and training programs. How important are CSR activities for the company you lead?
If a company like ours invests in a country and doesn’t manage to change that place in a positive way, it has greatly failed its mission. PPC wanted to invest herein Cimerwa, with its philosophy to focus on embracing positive development of sustainable value chains. PPC Cimerwa is not selling just a bag of cement, but more than a bag of cement. This is why our strap line is “Strength beyond the bag”.
Though we produce high quality cement, we also offer strong technical support. We believe in strong partnerships and support the communities that we operate in, making a contribution to building those countries and Africa. Cimerwa has built schools, employed teachers, built and maintains a clinic (both the clinic and school are fully funded by Cimerwa, including staff members), etc. We want to partner with individuals who are making a difference within the community without being part of Cimerwa’s core business. We also played a key role in the creation of women cooperatives that manufacture test blocks, allowing these individuals to sustain themselves financially, to be able to pay their families’ medical insurance, school fees and other expenses that they otherwise wouldn’t be able to afford. We achieved some notable successes with some of the members, who were able to acquire own land to develop their family homes. This success has led to exposing the team to bigger project contractors who developed the same kind of sustainable projects for other communities.
Another example, instead of importing the new plant’s furniture, we trained local carpenters to build it for the new built plant. We now want to structure these same carpenters into cooperatives so we can remove dependency on Cimerwa, grow and sustain their business themselves. The same was done with a group of tailors; they are currently involved in making uniform for teachers, students’ uniforms and working clothes for our clinic staff. Soon they will produce the plant safety gear. We would like to extend the products to export market.
Another project we were involved in was the co-financing for the development of the local road. In partnership with government, Cimerwa contributed to 40% of the total cost of the main road from Bugarama city to Cimerwa. This has not only helped us business-wise, but it also developed the community’s ease of doing business. The face of the entire area has been changed. We are “Strength beyond the Bag”.
As President Kagame said, “In Africa, today, we recognize that trade and investment, and not aid, are pillars of development.” What opportunities would you highlight for US investors?
There are untapped tourism opportunities next to Cimerwa, Rusizi District, which could extend the tourist choices of travel when they visit Rwanda. There is a hot spring in the close vicinity, which could be converted into a fantastic tourist destination; but investments are needed. The water there has some healing properties, and it would be a shame not to look into that. Through RDB (Rwanda Development Board) some studies were conducted on its potential (Cimerwa also completed its own studies) and the results show that our industry has no major impact on Mashyuza hot spring environment. High-end hotels could be built in order to take advantage of the extraordinary landscape in its surroundings. Investors should take a look at the real potential it has.
As for us, we will expand our activities further regarding manufacturing cement. Cimerwa is an investment opportunity by itself, with several investment opportunities on adjacent businesses such as energy projects, and more.
We can say you are PPC; you have it under your skin. You both grew up in the same area, and now you both expanded to Rwanda. What has been the biggest challenge you had to face in your career in PPC?
The biggest challenge I faced was during the construction phase of Cimerwa’s plant, balancing between running the old 100,000 tons/annum plant, optimizing it as far as possible, managing the construction of the new plant, operational readiness for the new plant and the process of change from the old plant to the new plant in particular skills transfer. The ultimate goal was to complete the construction of the plant, make it operational and avail the product to the market. Part of those goals are achieved; the current focus is to capacitate the local team members so that they can take over in the future.
Being the cement industry traditionally dominated by men, what would be your message to women across the continent to achieve their dreams?
Our industry is still dominated by men, you are right. Fortunately, most men are willing to share their knowledge and wisdom to grow women in their chosen careers. It is important to avail yourself, be courageous, never stop to learn, believe in yourself. You need to have confidence and humility and be bold to take a step to the future, network, learn through coaching and mentoring sessions. Though, more women leadership coaching is still required to increase the confidence of women to break the glass ceiling and deal with stereotypes in the business environment.
What is the most valuable lesson you learnt from your coach?
Ubuntu: humility, respect and tolerance to others. That’s how respect is gained.
You definitely have an entrepreneur state of mind. You have invested in the coffee business. Could you tell us more about it?
Back in South Africa I am as active as I am in Rwanda. I participated in women forums, and I am quite involved within my church to assist unemployed girls. I decided I wanted to develop an agricultural activity that needed no specific education for the people working on it. I financed that project, we produced some vegetables but the successful one was coffee processing. We are currently supplying the Okriasco coffee, which is slowly getting popular. We are also seeking investment to increase the capacity of coffee production to six hectares - currently it is grown on one hectare. The business is called Bright Future, an agricultural corporative, in partnership with Tshwane University of Technology and Bopangoe. Last year we won the best upcoming agricultural business national award, which motivated us even more. With Africa’s climate, hardworking workforce and the will for development growth, the African continent could feed the world by becoming the largest fresh food produce in the world.