22 February 2013

Publication: Business Day
Author: Edward West

SEPHAKU Holdings, the listed company with a 36% shareholding in Sephaku Cement, widened its headline loss to R9.8m in the six months to December 31 from a R5.6m loss a year before, but it was in a strong cash position, CEO Lelau Mohuba said on Thursday.

Sephaku Holdings’ share price fell 7.6% to R4.25 on Thursday after its results were released.

Sephaku Cement plans to commission a clinker plant towards the end of the year, which aims to produce 2.5-million tons of cement per year. It is 64%-owned by Nigeria’s Dangote Cement.

Mr Mohuba said the commissioning was on schedule and Sephaku would become a major player in the national cement market, which produces about 14-million tons of cement per year. “We will be among the big boys,” he said.

Sephaku Holdings’ operating loss widened to R10.1m from R6.9m in the interim period. The headline loss per share widened to 5.13c compared with 3.01c last year.

Shareholder approval for the acquisition of Metier Mixed Concrete was obtained on January 11 this year.

The company concluded a 10-year funding agreement deal valued at R1.95bn with Standard Bank and Nedbank in October.

Sephaku’s directors said this agreement would close the gap in terms of the capital they would require for Sephaku Cement to be fully prepared for market entry and for it to become a significant competitor in the wholesale and retail cement trade.

Dangote has, according to reports, invested more than R1.1bn in the cement venture at Aganang, near Lichtenburg in North West, making it the largest foreign direct investment in South Africa by a company from elsewhere in Africa.