Cimerwa, the country’s sole cement factory, is planning to construct a $50m (Frw27.4b) plant in Bugarama, to meet the increasing demand of cement in Rwanda.

The company, a subsidiary of Rwanda Investment Group (RIG) has hired a Chinese company, Pengfei Group Co. Ltd to oversee the construction of the new plant.

According to, Tribert Rujugiro RIG chairman, the new factory will be located just next to the current one. Rujugiro said that the new plant will have capacity to produce 600,000 tonnes of cement every year, six times bigger than the current plant.

Rujugiro said that RIG has already finished the agreements with the Chinese constructors for the plant to be completed by June 2010.

Rwanda partly relies on cement supplies from Kenya and Uganda, her neighboring East African countries.

The 15.2 per cent, reported growth in the construction and public works’ sector which doubled the country’s economic growth last year, has also forced the subsidiary to import more than 500 tonnes of cement from Ukraine and China every month in order to avert any likely shortage.

Officials say that last year the sector registered investments worth Frw13b from 11 projects and created 485 new jobs.

While a 50 kilogram sack of cement is sold at Frw11,000, Rujugiro, said that the price is mainly driven by speculators who cheat their clients.

"We set the price of cement manufactured by Cimerwa at Frw8,100, and the price for imported cement is Frw11,500. So on average a sack is supposed to be sold at Frw9500 to the final consumer,” he said.

Rujugiro said that RIG was optimistic that the new factory will be able to answer the current cement shortage challenge facing the construction sector.

He said that RIG is planning to start using peat as a source of energy to cut the high fuel and electricity costs which account for 70 per cent of the company’s total costs.

It is expected that the introduction of peat will account for 80 per cent of the company’s energy costs.

Rujugiro also said last Friday at a general meeting for shareholders that RIG, a company owned by some 43 local investors, garnered Frw1.7b in net profits in 2007.

He attributed the outstanding performance to the Frw1.2b of profits registered by Cimerwa.

He also said that much of the money was put on the fixed deposit accounts where the Commercial Banks have since earned them interest.

"Most of our projects are still nascent and we have not realised returns on investment from some of them,” Rujugiro told journalists shortly after the general meeting.

RIG, created in September 2006, is investing in extraction of methane gas from Lake Kivu in the western part of the country, silk and cement production, building of Kigali Industrial Park and peat extraction.

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