Namibia's cement market is facing a dual challenge of overcapacity and reduced exports, which has forced Ohorongo Cement, one of the country's largest cement producers, to consider selling its business.
Ohorongo Cement plans to sell its business to rival Whale Rock Cement, mainly because the company's cement production far exceeds the local market demand and exports have fallen sharply. Hans-Wilhelm Sch Schütte, managing director of the company, said that Namibia's annual demand for cement was about 600,000 tons, but the local plant had a capacity of 2.6 million tons. This huge imbalance between supply and demand has led to a serious oversupply, making it difficult for companies to maintain profitability.
Ohorongo Cement is one of Namibia's largest cement producers and has been run by Hans-Wilhelm Sch Schütte since its inception in 2008. The company is valued at about $110 million (N2bn). Its main shareholder is German cement giant Schwenk Zement, but now a Chinese company, West China Cement, is buying a stake in Schwenk. In addition, the Development Bank of Namibia, the Development Bank of Southern Africa and the Industrial Development Corporation of South Africa are significant shareholders in Ohorongo Cement. After years of capacity expansion,
Namibia's cement market is now facing the challenge of overcapacity. The sale of Ohorongo Cement is likely to trigger further consolidation in the industry, prompting other producers to re-examine their market positioning and strategies. In addition, with the increasing influence of Chinese enterprises in the African cement market, Chinese cement enterprises may also bring new technology and management experience to Namibia's cement industry.