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Kenya’s National Cement to invest $36 million after buying ARM assets

The acquisition will boost its market share to about 15%.

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National Cement Company, which this week signed a deal to buy the Kenyan assets of ARM Cement from its administrator, plans to invest $36 million to modernise the production plants it is acquiring, its chairman said on Friday.

ARM, which was once the second biggest cement maker in Kenya behind LafargeHolcim’s Bamburi Cement, was put under administration last August by some of its creditors over debts totalling $190 million. Its shares were then suspended from the Nairobi bourse.

National Cement emerged as the winner of a bidding round to buy the company’s Kenyan assets, including land and plants, agreeing to pay $50 million, ARM’s administrator PWC said on Tuesday.

National Cement, which holds 11 percent of the Kenyan cement market with its Simba Cement brand, wanted to raise its production capacity in the East African nation, where cement consumption has been rising in recent years due to a construction boom.

The eight-year old cement firm was especially keen to have an extra production plant on the Kenyan coast, where it does not have a presence, said National Cement chairman and founder Narendra Raval.

A total of $29 million of the new investment will go towards modernising the “rundown” production plant at the coast, Raval told Reuters.

“It is in pathetic condition,” he said. The balance will be invested in a second plant situated near Nairobi, he said.

The acquisition of ARM’s plants will initially increase National Cement’s 1 million tonne annual capacity by 400,000 tonnes, Raval said.

ARM Cement has an installed annual production capacity at its two plants in Kenya of 1 million tonnes.

The acquisition will boost its market share to about 15%.

National Cement is also interested in buying ARM’s assets in Tanzania and Rwanda, Raval said, without giving details.

George Weru, one of ARM Cement’s administrators, told Reuters it is still considering what to do with those units, with its options including capital injection, a sale of shares or a sale of the assets.

“It’s still a very flexible kind of process,” Weru said, adding that they aim to complete the administration by the August deadline.

ARM Cement slid into losses after investing heavily in its Tanzanian business in 2014, which did not generate a return.

In Tanzania, ARM has a 1.6 million tonnes in annual production capacity at two plants of equal size. Its Rwanda plant produces 100,000 tonnes a year.

Weru said the settlement of ARM’s liabilities will take longer: “We need to get the proceeds and also complete the adjudication of the claims”.

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Zimbabweans lament after price of bread rises by 60% overnight

Bakers said they were forced to hike their prices due to rising production costs

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Zimbabweans lament after price of bread rises by 60% overnight

The price of bread shot up 60 per cent overnight in Zimbabwe, in the latest blow for a population already struggling with spiralling living costs.

Zimbabweans can barely keep pace with the price rises that have rekindled fears of hyperinflation which reached 500 billion per cent a decade ago and forced the country to trash its own currency.

Already, many families live on one meal a day, with the country in the grip of a major downturn that has provoked biting shortages of basics such as fuel and medicine.

Bakers said they were forced to hike their prices due to rising production costs.

Electricity prices have “gone up significantly, the price of fuel has also been going up weekly, the prices of raw materials have also gone up including the cost of importing wheat,” said Dennis Wala, the president of the National Bakers’ Association.

Electricity is only available for around six hours a day, forcing many bakers to use generators to run their ovens.

“The bread manufacturer is at the end of the value chain and we have to factor in all these costs, but we don’t prescribe prices to our members,” Wala told reporters.

The price of a loaf of bread soared to 15 Zimbabwe dollars (around US$1) on Wednesday from nine dollars the previous day, according to a correspondent.

Bread is the second most important staple in the country after a thick cornmeal porridge known in the local Shona language as “sadza”.

After decades of mismanagement under former President Robert Mugabe, Zimbabwe reached absurd levels of hyperinflation in 2008-2009 when the central bank started printing money.

Mugabe’s successor, Emmerson Mnangagwa has failed to stop the latest inflation surge, last week begging for patience to bring the economy back from the “dead”.

But the economy is near breaking point.

Hundreds of thousands of government workers said this week they could no longer afford to report for duty as their wages had been rendered almost worthless.

Last week, the authorities quadrupled the price of electricity — which is already in short supply after a 400 per cent hike in August.

Earlier this month, the price of fuel rose more than 25 per cent, the latest in series of regular increases.

The official inflation rate was 290 per cent last month, but economists estimate it is at least double that figure.

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Nigeria to sign military cooperation deal with Russia

Nigerian President, Muhammadu Buhari is due to meet Putin on the sidelines of a Russia-Africa summit in Sochi

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Nigeria to sign military cooperation deal with Russia

Nigerian President, Muhammadu Buhari hopes to sign a military-technical cooperation deal with Russia at talks with President Vladimir Putin this month that will help it fight Boko Haram militants.

The Nigerian leader is due to meet Putin on the sidelines of a Russia-Africa summit in the Black Sea city of Sochi amid a push by Moscow to expand its influence in Africa.

“We’re sure that with Russian help we’ll manage to crush Boko Haram, given Russia’s experience combating Islamic State in Syria,” Nigerian envoy, Steve Ugbah said in an interview with Russia’s RIA news agency, adding that Nigeria was interested in purchasing Russian helicopters, planes, tanks and other military equipment.

Ugbah says a military-technical cooperation deal between Russia and Nigeria had already been drafted and that it is awaiting finalisation. 

“We hope President Buhari can take the talks to their logical end. The agreement will open new possibilities in such areas as the supply of military equipment and training for specialists,” he adds.

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Nigeria, Cameroon to plan Cocoa price cartel

The plan suggested by Nigeria is part of a trend by cocoa growers in West Africa and Latin America

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Nigeria, Cameroon to plan Cocoa price cartel

Nigeria aims to team up with Cameroon to agree on a premium for its cocoa with buyers, after the world’s top growers, Ivory Coast and Ghana set a price floor for the crop.

The plan suggested by Nigeria, the world’s fourth-largest cocoa producer, is part of a trend which has seen growers in West Africa and Latin America seek to influence prices in the global market.

The move follows Ghana and Ivory Coast’s union in July, which set the price for a ton of cocoa from their countries at $2,600 plus a $400 premium described as “living income differential”.

READ: Cocoa industry stakeholders accept Ghana, Ivory Coast price

Both countries produced 60 per cent of the world’s cocoa in 2018.

Vice President of the World Cocoa Producers Organisation, Sayina Riman says discussions will be held with the private sector and the Nigerian Government before formal talks are held with Cameroon.  

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