RMB instrumental in Ohorongo restructuring
The Ohorongo Cement plant at Sargberg near Otavi was established in 2010 by Schwenk Zement International group, a German family-owned group, to supply Namibia’s cement total requirements and cater for some exports to neighbouring markets. The lcoal market has grown faster than expected with double-digit growth in construction and large capital projects, benefiting the local cement industry.
RMB Namibia, a division of FNB Namibia Limited, is a leading corporate and investment bank and part of one of the largest financial services groups in Africa, the FirstRand Group.
“RMB Namibia is delighted to have formed a strong Namibian partnership with Ohorongo Cement, owner of Africa’s most modern cement plant and the only one which exists in Namibia. The plant is a cornerstone of Namibia’s “Growth at Home” and industrialisation strategies in support of NDP4 and Vision 2030” the two partners said.
RMB Namibia had been appointed as mandated lead arranger in the restructuring and “Namibianisation” of the funding package for Ohorongo cement, previously dominated by the the German Development Bank DEG, The Development Bank of South Africa DBSA and the Industrial Development Corporation IDC. The Development Bank of Namibia also played a critical early role in the project, by taking an equity stake in Ohorongo Cement, which it has now increased with the restructuring. FNB Namibia has also provided an N$100 million working capital facility for the plant start up.
RMB Namibia provided bridge funding of N$290 million to allow Ohorongo Cement to settle its European bank debt early. Subsequently RMB Namibia extended N$350 million long-term debt to Ohorongo, fully funded out of Namibia. RMB Namibia also extended N$150 million in working capital to Ohorongo.
“Ohorongo Cement does more than merely manufacturing cement. A host of supplier businesses have emerged around the Otavi cement plant, ranging from bush-clearing to pallet manufacturing to transport and catering businesses, employing many more Namibians than just the 300 people working at the plant. The FNB Namibia Group is engaging with Ohorongo on this greater “ecosystem’’ including fostering partnerships with joint corporate social responsibility projects.
Ohorongo has established an excellent track record for quality and service delivery and is price competitive with other southern African plants, even on an ex-factory basis. This has provided a boost to the booming Namibian construction industry and to large capital projects like the Walvis Bay Port expansion, the Husab Uranium mine, Otjikoto and Tschudi mines and the Neckertal dam.
