Staff Writer 
KHAYAH CEMENT is banking on the successful completion of talks with finance partners to unlock resources for the refurbishment of the kiln at its Manresa plant in Harare, which is central to its short-term recovery strategy.
The cement producer, formerly Lafarge Zimbabwe has been battling operational challenges for many years mainly due to persistent plant breakdowns and structural inefficiencies resulting in its placement under corporate rescue last month.
Company secretary and legal advisor Arnold Chikazhe said in a statement recently that the kiln’s refurbishment was critical to the group’s sustenance.
“Significantly negotiations for the financing of the kiln refurbishment are in progress, with some work already having started.
Subject to successful conclusion of the negotiations, recommissioning of the kiln will likely be in the first half of 2025,” said Chikazhe.
The kiln, which is essential for producing the company’s clinker requirements at lower and competitive costs relative to imported clinker, was mothballed in 2023 as it was three years overdue for shutdown maintenance and failed to meet its original 300 000 tons annual capacity
This saw Khayah adopt a grinding station model to maintain a foothold in the market.
Adversely, this necessitated buying a significantly more expensive clinker to support the new business model.
Mid-last year, Khayah Cement chief executive, Innocent Chikwata, told The Financial Gazette that the refurbishment of the kiln would cost between US$15-US$120 million.
“We are at a stage where we have all the options, whether its equity release or debt financing and evaluating what will work best in terms of future cash flows to support the type of funding that we are going to get.
“So as of now, I can’t really say which direction we are taking but we have been evaluating, bringing together all options that are really good for us.
“Once identified and everything is agreed on then we start to see work on the project,” Chikwata said then.
He said the kiln refurbishment will be done in phases, with the first phase focusing on returning the original capacity of the plant before embarking on the second phase which will include installing latest components to the plant to augment capacity further.
Ideally, this should ensure that the group produces enough clinker to meet all its cement requirements with excess clinker expected to be sold to other domestic cement players.
The group installed a new vertical mill plant in 2022 which was commissioned in 2023, doubling cement production capacity.
This however created a mismatch against an antiquated kiln that fell short of producing sufficient raw material to feed the vertical mill plant.
“Prospects of meeting the company’s obligations were hampered by unanticipated and yet major equipment breakdown on the vertical cement mill…it resulted in significant loss of production coupled with large amounts of money being spent on repairing these critical pieces of equipment,” Chikazhe said.
It was expected that the group would get a fresh lease of life in 2022 when new owners, Fossils Mines, acquired a 76,45 percent stake in Lafarge Cement Zimbabwe held by Associated International Cement Limited.
A confluence of challenges including legacy debts, old equipment and uneven competition from cheaper cement imports have continued to present hurdles for the group.
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