Summary of Proposed Investment
Project Number
10530
Company Name
Diamond Cement Ghana Limited
Date SPI Disclosed
Apr 23, 2001
Country
Ghana
Industry
Manufacturing
Projected Board Date
Jun 10, 2001
Status
Completed
Sector
Cement
Department
Regional Industry - MAS Africa
Environmental Category
B - Limited
Previous Events
Approved : Jun 29, 2001
Signed : Jun 28, 2002
Invested : Jan 26, 2004
Project Description
The project is to establish a new 100-ton per hour (about 640,000 tons p.a. of achievable output) grinding unit to produce ordinary Portland cement for the Ghanaian market. Diamond plans to source clinker, the major input in cement manufacturing, from West African Cement S.A., (Wacem), a Togolese company, which has a production capacity of 200 tons of clinker per hour (1.2 million tons p.a.) and in which IFC invested US$6 million in loan and equity (investment #8962).
There is a strong demand for cement and a need for additional production capacity in Ghana. Over the past decade, cement consumption in Ghana has increased at an average rate of 11% p.a. Demand is currently estimated at 2.1 million tons and is expected to reach 2.7 million tons by 2005. Ghacem Ltd., Ghana''s only cement producer, with a total nominal capacity of 340 tons per hour (2.1 million tons p.a.), is already operating at high rates.
Diamond is expected to have strong economic effects, including (i) a significant reduction in the price of cement due to competition and the contemplated lower price of its clinker, (ii) an improvement in the quality of the cement sold in Ghana, (iii) the creation of some 280 direct jobs and (iv) the development of regional integration and Ghana''s exports.
IFC role includes providing project finance, comfort and technical advice. IFC’s investment is critical, as Ghana’s financial sector is not in a position to provide either the long-term financing the project needs, due to the short-term nature of its resources and its very high rates, or the level of foreign currency it requires. IFC will also provide comfort to the sponsors, a useful asset, given that the overall sub-region is still perceived as risky. Finally, IFC has worked with the sponsors to improve the terms of equipment supply arrangements.
There is a strong demand for cement and a need for additional production capacity in Ghana. Over the past decade, cement consumption in Ghana has increased at an average rate of 11% p.a. Demand is currently estimated at 2.1 million tons and is expected to reach 2.7 million tons by 2005. Ghacem Ltd., Ghana''s only cement producer, with a total nominal capacity of 340 tons per hour (2.1 million tons p.a.), is already operating at high rates.
Diamond is expected to have strong economic effects, including (i) a significant reduction in the price of cement due to competition and the contemplated lower price of its clinker, (ii) an improvement in the quality of the cement sold in Ghana, (iii) the creation of some 280 direct jobs and (iv) the development of regional integration and Ghana''s exports.
IFC role includes providing project finance, comfort and technical advice. IFC’s investment is critical, as Ghana’s financial sector is not in a position to provide either the long-term financing the project needs, due to the short-term nature of its resources and its very high rates, or the level of foreign currency it requires. IFC will also provide comfort to the sponsors, a useful asset, given that the overall sub-region is still perceived as risky. Finally, IFC has worked with the sponsors to improve the terms of equipment supply arrangements.
Sponsor / Cost / Location
Development Impact
Related ESRS/ERS
Contacts
For Inquiries About the Project, Contact
Mr. Prasad Motaparti, Managing Director
Diamond Cement (Ghana) Ltd.
P.O. Box 69
Aflao
Ghana
Diamond Cement (Ghana) Ltd.
P.O. Box 69
Aflao
Ghana