Cement manufacturer Cimerwa sees small FY profit as revenues improve

Rwanda's leading cement manufacturer, Cimerwa PPC, has reported a 1% profit after tax in its 2020 financial statement, a result largely attributed to the fourth-quarter growth in the construction sector. In an exclusive interview with CNBC Africa, Albert Sigei, the CEO of Cimerwa PPC, discussed the company's performance in the face of unique challenges posed by the COVID-19 pandemic. Despite the difficult circumstances of the past year, Sigei expressed satisfaction with the company's achievement, emphasizing the collaborative effort of the team, stakeholders, customers, and other partners. He highlighted how the company managed to navigate disruptions, including a 40-day halt in cement production due to the pandemic and a major shutdown in the first quarter of the year, to achieve a 1% revenue growth. Sigei credited the team's initiatives in optimizing production processes and leveraging market opportunities as key factors in the company's success. He also noted the favorable business environment in Rwanda, with the government's commitment to infrastructure development, such as the construction of 20,000 classrooms in a short period, which Cimerwa actively contributed to by supplying significant quantities of cement. The CEO outlined the company's sustainability efforts, including cost-saving initiatives and innovation in fuel substitution, transitioning from coal to biomass, and pit usage. These strategies, combined with a dedicated team and increased production capacity, enabled Cimerwa to weather the challenges and position itself for future growth. Regarding liquidity and human capital management, Sigei highlighted Cimerwa's robust cash balance of $10.3 million and the decision to prioritize retaining and bolstering the workforce amidst uncertainty. By focusing on strengthening the organization internally and capitalizing on market opportunities, the company avoided drastic measures like layoffs and maintained operational continuity. Sigei expressed optimism about the sustainability of Cimerwa's improved performance, particularly citing the record-breaking sales in the fourth quarter of 2020 as evidence of the company's resilience. He underscored the favorable market conditions in Rwanda, driven by the government's ambitious development agenda and significant infrastructure projects on the horizon. Looking ahead, Sigei outlined Cimerwa's strategic advantages, including being the only integrated cement manufacturer in Rwanda, with control over the entire supply chain from limestone quarrying to cement production. He emphasized the company's readiness to defend its market share and expand capacity to meet the growing demand, both domestically and in regional markets. Addressing concerns about increased competition from regional players with the operationalization of the African Continental Free Trade Area agreement, Sigei remained confident in Cimerwa's position. He emphasized the company's localized production advantage, strong stakeholder relationships, and commitment to innovation and cost efficiency as key elements in staying ahead of the competition. In conclusion, Cimerwa's CEO expressed a forward-looking approach to navigating challenges and seizing opportunities in the cement market, underpinned by a clear strategy for sustained growth and market leadership.