Cimerwa, Rwanda’s largest cement company by output and market share is considering listing a corporate bond on the Rwanda Over the Counter (OTC) bourse to raise funds for financing its proposed new cement factory, according to the company’s top manager.

Cimerwa is set to construct a new cement factory that will cost nearly $70 million (Rwf39.5 billion) in its bid to increase cement production capacity six times higher than the current factory.

A corporate bond is an instrument of debt that entitles the lender/investor, to a refund of his cash after some agreed time with some interest on top. The interest can either be based on a fixed or floating rate.

Jean Claude Barihuta, Cimerwa’s Director General said that they are still carrying out studies to establish the right amount of money that should be raised from the public as well as coming up with the right interest rate that might be determined during the process of book building.

The company will also consider other dearer cash-rising options if it finds it expensive to borrow from the public.
"It is a long process. We have to fulfil the requirements of the Capital Market Advisory Council (CMAC),” Barihuta said in a phone interview on Friday.

Management says that the new factory, which will have capacity to produce 600,000 tonnes of cement per annum, is a dry process technology as compared to the wet process currently in use that produces 100,000 tonnes per annum.

Dry process is considered to be more environmental friendly and it’s the current cement production technology.

Cimerwa says that new capacity would be enough for both the domestic and the regional markets of Burundi and Eastern Congo.

According to sources, some of the money will be used to finance the company’s $3 million peat project that is expected to trim-down energy costs by 80 percent.

If Cimerwa succeeds in listing its bond, it will mean that it is the second private company to issue a corporate bond through the OTC market since the inception of the Rwandan bourse early last year.

Currently the OTC market trades only BRC corporate bond that was issued last year to raise money for financing mortgages. 

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