Business Plan ECCL PDF Final

EASTERN COMBIBED COMPANIIES T LTD ( IZUBA CEMENT) – Business Plan
BUSINESS PLAN
EASTERN COMBINED
COMPANIES LTD ( IZUBA
CEMENT)
PROPOSED DEVELOPMENT
OF
CEMENT PLANT
IN RWANDA
1
AUGUST 2021
TABLE OF CONTENTS
1 EXECUTIVE SUMMARY
2 VISION
2.1 Vision Statement
2.2 Milestones
3 MARKET ANALYSIS
3.1 Overall Market
3.2 Market Changes
3.3 Market Segments
3.4 Target Market
3.5 Customer Characteristics
3.6 Customer Needs
3.7 Buying Decisions
4 COMPETITIVE ANALYSIS
4.1 Industry Overview
4.2 Nature of Competition
4.3 Industry Changes
4.4 Primary Competitors
4.5 Competitive Products
4.6 Opportunities
4.7 Threats
5 STRATEGY
5.1 Competitive Capabilities
5.2 Competitive Weakness
5.3 Strategy
5.4 Implementing Strategy
6 PRODUCTS & SERVICES
6.1 Description
6.2 Positioning
6.3 Competitive Evaluation
6.4 Future Products
7 SALES & MARKETING
7.1 Marketing Strategy
2
7.2 Sales Tactics

7.3 Advertising
7.4 Promotions
7.5 Publicity
8 OPERATIONS
8.1 The Cement Plant
8.2 Plant Construction
8.2 Key Personnel
8.2 Organizational Structure
8.3 Human Resources Plan
8.5 Customer Service
9 FINANCE
9.1 CAPEX
9.2 Assumptions
9.2 Profit & Loss
9.3 Cash Flow
10 APPENDICES
3
EXECUTIVE SUMMARY
EASTERN COMBINED COMPANIES LIMITED ( IZUBA CEMENT) (ECL) is a cement
manufacturing and marketing company registered in Rwanda. The Company is

led by a competent management team, with proven
experience in corporate technical, financial and operational
management. The Company Chief Executive Officer is Eng.
KABERA James. The management team is oversighted by a
Board of Directors, whose Chairman is Mr. SEGATABAZI
Protais and the Vice Chairman is Rtd. Col. NDORE RURINDA
The Company’s vision is to be “the premier cement
manufacturing and marketing company supporting
sustainable development in the Lake Kivu region.” The
Company will partner to protect and conserve the delicate
and endangered Gorillas resident in the Virunga ecosystem
which straddles the countries of Rwanda, Uganda and
Democratic Republic of Congo (DRC). The Company commits
to contribute a portion of its sales to projects and programs
4
aimed at the Virunga ecosystem protection and

conservation.
The Company is desirous to construct and operate a cement
factory at a site in Rwamagana District in Rwanda. The
project will be implemented in two phases; phase 1 to be
constructed in 2022 and launched in January 2023 will be a
cement grinding plant of 3000 tonnes per day, or the
equivalent of 1,000,000 metric tonnes per year. The phase 2
will be constructed within the first 5 years of the launch of
the phase 1 and will be of similar capacity to the phase 1,
thus 1,000,000 tonnes per year. The combined capacity of
the phase 1 and phase 2 will be 2,000,000 metric tonnes per
year.
The principal market for the company is the Lake Kivu
region, comprising Rwanda, Burundi and the eastern DRC.
Presently the cement demand of this market exceeds
3,000,000 metric tonnes per year. There are two cement
companies located in Rwanda, namely, CIMERWA cement
Ltd with a capacity of 600,000 metric tonnes per year and
commands a 50% market share and PRIME CEMENT LTD,
5
which was launched in 2020 with an installed capacity of

350,000 metric tonnes per year. The combined cement
supply of the two companies is about 600,000 metric tonnes
per year. The demand deficit is served by cement imports
from Tanzania and Kenya.
Eastern Combined companies Ltd( IZUBA CEMENT) is
seeking equity and/or debt financing for USD. 36 million to
finance the phase 1 project. This will constitute 90% of the
required project capital expenditure (CAPEX) with the
Company contributing 10 per cent – USD. 3.5million. The
Company projects to repay the equity financing within 10
years. The Company has prepared a business plan and it is
willing to share the business plan with prospective investors
for discussion and negotiations.
Eastern Combined companies ltd (IZUBA Cement). is
currently in negotiations for partnership with SAVANNAH
Cement Ltd., a leading cement company based in Kenya.
1.1 Business Concept
The Cement industry in the East African region has

expanded rapidly in the past several years and growth is
6
expected to continue at a strong pace for the foreseeable

future. This offers excellent opportunities for new
companies to enter this market. We intend to address the
needs of customers in this market who seek innovative and
cheaper cement products. Distinguishing characteristics of
our services will be an innovative and customer appealing
cement brand proposition.
1.2 Current Situation
At this point, we have refined our business concept and

developed an extensive plan for taking this concept to
market. We are seeking initial equity investors or partners.
1.3 Key Success Factors
We are a very customer-focused, committed to solving all of
our customer’s needs and doing everything we possibly can
to keep them satisfied. This approach will ensure that we
retain a highly satisfied clients, that we get a high rate of
repeat business and that we get referrals. Also, especially
once we have worked for a customer, we believe that the
customer will be less likely to move to our competition.
1.4 Financial Needs
7
In order to effectively launch the business, we project a total

need for United States Dollars Thirty six million
(36,000,000) of start-up financing of which United States
Dollars Thirty twoMillion four hundred thousand (USD.
32,400,000) to be investor equity or debt and United
States Dollars THREE MILLION SIX HUNDRED
THOUSAND (USD. 3,600,000) to be the developers
contribution. Principal uses of funds are as presented in
Table 1.5 below:
AMOUN
ITEM DESCRIPTION % T
(USD.)
Plant Land Purchase - Market 2,000,0
RWAMAGANA (20ha) Rates 00
Pozzolana Quarry Purchase Market 1,600,0

– MUSANZE (15ha) Rates 00
PLANT CONSTRUCTION
Buildings 30% 9,600,0
00
Equipment 40% 12,960,
8
000
Plant Construction & 15% 4,860,0
Equipment Installation 00
Equipment Importation 5% 1,620,0
00
Plant Design & 5% 1,620,0
Construction 00
Supervision
Contingencies 5% 1,620,0
00
Working Capital (5% of 5% of 1,620,0
Annual Sales) Annual 00
Sales
TOTAL PROJECT 36,000,
BUDGET 000
The start-up capital sought could be in the form of equity

capital or debt capital. We project that within 10 years, the
company will have paid off all the borrowed money.
Appendix E presents the cash-flow projects and the profit
and loss account.
1.5 Top Management Team

9
The Chief Executive Officer (CEO) is Eng. KABERA James.

The Chairman of the Board of Directors by Mr. SEGABATAZI
Protais and the Vice Chairman is Rtd. Col. NDORE RURINDA.
2 VISION
2.1 Vision Statement
To be the premier cement manufacturing and marketing
company in the Lake Kivu region supporting sustainable
development.
10
Within the next few years, EASTERN Combined companies

Ltd(IZUBA CEMENT) will grow to become a leading cement
manufacturer in the Lake Kivu region market (Rwanda,
Eastern DRC and Burundi). We will be known for superior
quality cement products that will set the standard in our
market.
We intend to be seen by our customers as the industry
innovator. We particularly want to be known as a company
that is trying hard all the time to find new ways of doing
business that will benefit its customers.
2.2 Milestones
Important milestones for launching this business are as
presented in the table below
CRITICAL PATH ACTIVITY MILESTONE
INVESTOR CONFIRMATION APRIL - SEPTEMBER

2021
BUSINESS PLAN UPDATE 1 MONTH (OCTOBER
2021)
EPC CONTRACTOR 1 MONTH (OCTOBER
11
PROCUREMENT 2021)
PLANT DETAILED DESIGN 3 MONTHS (OCT.-
DEC. 2021)
REGULATORY 3 MONTHS (OCT.-
PERMITTING(Including EIA) DEC 2021)
CIVIL WORKS CONSTRUCTION 10 MONTHS (JAN.
& EQUIPMENT ORDERS 2022 – OCT. 2022)
PLANT COMMISSIONING & NOV. 2022 –DEC.
HANDOVER 2022
PLANT LAUNCH JANUARY 2023
3 MARKET ANALYSIS
12
3.1 Overall East Africa Cement Market

A summary of the E. A. cement market is as below:
 East African Construction Sector Remains Resilient
Despite Headwinds: A 3 year CAGR in cement
consumption per capita of 8.1% to 96.7 Kgs in 2018, on
the back of 3 year CAGR of 8.7% in cumulative regional
cement consumption to 14.9 MN Tonnes in 2018F.
 Expansions in The Midst of Oversupply: The number of
cement players increased from 16 in 2013 to 19 in 2016,
to see a 3 year CAGR in installed grinding capacity of
17.1% to 21.1 MN Tonnes in 2016E.
 East African Infrastructure Space-A Growing Cement
Consumer in The Region: East Africa’s (Ethiopia
included) 3 year average infrastructure project value is
estimated to be USD 61.97 BN in 2015, new and ongoing
projects included, with transport projects accounting for
approximately 51.0% of the total project value.
 Clinker Self Sufficiency Versus Offshore Sourcing: In
2012, East Africa’s split between imported clinker and
locally manufactured clinker stood at 43:57, suggesting a
13
regional clinker shortfall, with rapid regional capacity

expansion majorly focused grinding capacity.
 Competition & Undercutting: A Red Ocean Situation:
This progressive cement supply has resulted in price
stagnation of retail centric cement in Kenya, and Uganda
at USD 110.00, USD 130.00 respectively, while Tanzania’s
prices slumped to USD 80.00 in 2016.
Table 3.1 below presents the market statistics.
TABLE 3.1: EAST AFRICA CEMENT MARKET

COUNTRY CEMENT Company MARKET PRODUCTION
SHARE (%) (TPA)
RWANDA
CIMERWA CEMENT 50 800,000
14
LTD
PRIME CEMENT 600,000
TOTAL
KENYA
BAMBURI CEMENT 32.6
LTD
MOMBASA CEMENT 15.8
LTD
E.A. PORTLAND 15.1
CEMENT Co.
SAVANNAH CEMENT 15.0
LTD
ARM CEMENT LTD 13.5 Under
Receivership
NATIONAL CEMENT 8.0
LTD
KENYA’S TOTAL ANNUAL CEMENT PRODUCTION WAS 6.7

MILLION TONNES AND THE ANNUAL CONSUMPTION WAS 6.3
MILLION TONNES. THE SURPLUS OF 400,000 TONNES IS
EXPORTED TO E.A REGIONAL COUNTRIES
UGANDA
TORORO CEMENT 44.0 3.0 MILLION
LTD
HIMA CEMENT LTD 28.0 1.9 MILLION
SIMBA CEMENT LTD 15.0 1.0 MILLION
KAMPALA CEMENT 13.0 900,000
15
LTD
IN 2018, UGANDA’S TOTAL ANNUAL CEMENT PRODUCTION

WAS 6.8 MILLION TONNES AND THE ANNUAL CONSUMPTION
WAS 2.4 MILLION TONNES. THE SURPLUS OF 4.4 MILLION
TONNES IS EXPORTED TO THE COUNTRIES OF RWANDA,
SOUTH SUDAN AND DRC
TANZANIA
DANGOTE CEMENT
LAKE CEMENT LTD
TANGA CEMENT LTD
CAMEL CEMENT LTD
KILIMANJARO
CEMENT LTD
ARM CEMENT LTD Under
Receivership
MBEYA CEMENT LTD
TANZANIA 36.0
PORTLAND CEMENT
RHINO CEMENT Under
Construction
MTWARA CEMENT
LTD
KISARAWE CEMENT
LTD
TANZANIA’S TOTAL ANNUAL CEMENT PRODUCTION WAS 7.1
MILLION TONNES AND THE ANNUAL CONSUMPTION WAS 4.1
16
MILLION TONNES. THE SURPLUS OF 3.0 MILLION TONNES IS

EXPORTED TO THE COUNTRIES OF RWANDA, BURUNDI AND
DRC
The market forecast a decline in regional utilization rates

from 61.7% in 2017F to 45.4% in 2018F, on the back of 11.3
MN tonne increase in installed capacity in 2018. This is
despite forecasted regional production growth at 1.6x
regional GDP growth, therefore noting a 3 year CAGR of
9.7% to 15.5 MN tonnes in 2018F.
Out of the 17 cement players in the East Africa Region, only 2
players are clinker self-sufficient. Cheap imports from Asia
have notoriously found their way into the East African
region through the Kenyan and Tanzanian ports, further
contributing to the oversupply situation.
3.2 Market Trends
 East African Construction Sector
The forecast of 3 year CAGR in cement consumption per
capita of 8.1% to 96.7Kgs in 2018, on the back of 3 year
CAGR of 8.7% in cumulative regional cement consumption to
14.9 MN Tonnes in 2018F. The East African region’s (Kenya,
17
Uganda, Tanzania) cement and construction sectors have

noted resilience over the last 3 years despite headwinds
stretching from power tariff hikes, currency devaluations
and high interest rates which cur-tailed vibrant construction
activity, hence high cement consumption growth. Despite the
protracted challenging period, there was steady growth in
cement consumption within the region, with 3 year CAGR in
regional consumption per capita of 7.5% to 86.9 Kgs in
2016E noted. (Kenya, Tanzania and Uganda’s per capita
consumption estimated at 124Kgs, 78Kgs and 53Kgs in
2016E respectively). This however remains significantly
lower than West Africa’s 115Kgs (Nigeria’s 126Kgs) and
Egypt’s 600Kgs per capita consumption.
Depreciating currencies and high interest rates especially in
2015 were a function of the global decline in commodity
prices which the region has a heavy reliance on, resulting in
the slumped economic growth. General elections held in
Tanzania and Uganda in 2015 and 2016 respectively, as well
as the Kenyan general elections to be held in 2017, resulted
in a slow-down in private sector construction as a wait-and-
18
see approach is typically employed during pre-election

periods. Therefore estimate a regional y-o-y consumption
growth of 8.1% 2016E (7.8% in Kenya, 5.9% in Uganda,
9.5% in Tanzania).
 Cement Production Expansions Trends:

The number of cement players increased from 16 in 2013 to
19 in 2016, to see a 3 year CAGR in installed grinding
capacity of 17.1% to 21.1 MN Tonnes in 2016E. We therefore
estimate a 341 bps dip in actual regional utilization rate to
58.0%, translating to regional y-o-y production growth
forecast of 9.3% to 12.8 MN Tonnes in 2016E. The significant
y-o-y dip in utilization rates is courtesy of the
commissioning of Dangote’s 3.0 MN Tonne plant in Mtwara,
Tanzania which resulted in a 15.7% y-o-y increase in
regional installed grinding capacity in 2016.
Despite the obvious grinding capacity surplus, there have
been several announcements concerning potentially new
19
cement entrants as well as existing cement producers

ramping up capacity.
 In Uganda, the construction of Kampala Cement’s 0.8
MT grinding plant is ongoing
 The government of Uganda in partnership with Moroto
Ateker Cement plans to build a cement plant in
Karamoja, Uganda. The feasibility study of the plant is
complete and the plant will be constructed in 2 phases.
 Hima Cement plans to double its grinding capacity to
1.6 MN Tonnes by building a grinding plant in Tororo
district, Uganda (expected to be completed in 2018).
 In Tanzania, the recently commissioned Dangote, ARM
Cement and Tanga grinding plants in 2015/16
collectively increased Tanzania’s installed grinding
capacity by 4.5MN Tonnes.
 Lake Cement plans to build a 1.4 MN Tonne grinding
plant in Bagamoyo, with construction to start mid-2017
and the plant is to be tentatively commissioned in mid-
2018.
20
 EAM, Mamba and Sungura companies are also planning

to venture into the Tanzanian cement landscape.
 EAM Company and Sungura Cement plan to construct a
3.0 MN Tonne and 1.0 MN Tonne plants respectively (in
Tanga) with EAM expressing its focus on exports and a
possibility of ballooning its production capacity to 7.0
MN Tonnes, should the government agree to its ex-
porting terms.
 Mamba Cement plans to build a 1.0 MN Tonne
integrated plant in Bagamoyo, Tanzania.
 All 3 potential cement entrants are in discussions with
the government of Tanzania concerning the terms of
operations.
 In Kenya, Savannah Cement has announced plans to
double its Athi River grinding plant capacity to 2.4MN
Tonnes. Inauguration of the additional capacity is set to
be in mid-2018.
 Cemtech Sanghi is also said to finally construct a 1.2 MN
Tonne plant in West Pokot after an extended delay
period from 2010.
21
 Bamburi Cement is also planning to increase its capacity

by 0.9 MN Tonnes in Kenya to keep up with its cement
demand.
In light of the aggressive capacity expansion underway, the
region’s capacity surplus will result in sub-optimal
utilization rates, hence rising OPEX and compressed margins
among cement producers, especially given the region’s price
stagnation. It is forecast a decline in regional utilization rates
MN Tonne increase in installed capacity in 2018. This is
9.7% to 15.5 MN Tonnes in 2018F.
Although Tanzania has seen a rapid increase in installed
capacity due to an abundance of limestone, natural gas and
coal deposits, the market demand growth has not absorbed
this. This could therefore result in several planned capacity
addition plans in Tanzania being shelved, given that the
current utilization rates are issuing warning signs of
possible consolidations in the medium term, as evidenced by
22
3 cement plants who are currently operating on an ad hoc

basis in Tanzania. Certain planned projects are however
strategically intended for the larger infrastructure projects
expected in the near future, rather than for the sake of
securing/growing market share in the already saturated
retail market.
East African Infrastructure Projects:
East Africa’s (Ethiopia included) 3 year average
infrastructure project value is estimated to be USD 61.97 BN
in 2015, new and on-going projects included, with transport
projects accounting for approximately 51.0% of the total
project value. The energy & power sector comes a distant
second at 30.0% while real estate accounted for 1.0%. The
oil & gas sector (debuted in 2014) in 2015 accounted for
3.0% of the region’s project value. In line with the region’s
goal of shifting to supply-side economic growth,
governments have intensified their infrastructure
investment ventures to see Governments’ percentage
ownership of on-going and future projects stand at circa
85.0%.
23
Among key ongoing infrastructure projects is the Mombasa-

Kigali Standard Gauge Rail-way (SGR). Kenya’s portion
(Mombasa-Malaba) is expected to be completed in 2 phases.
Phase I (472 Kms between Nairobi and Mombasa) already
complete ahead of its launch in June 2017. The second phase
is split into 3 sections, the Nairobi-Naivasha, Naivasha-
Kisumu and Kisumu-Malaba routes estimated to stretch over
713 Kms. Ground breaking for phase 2 (a) (financed by Exim
Bank of China) is expected to break ground in 1Q17, as
phase 2 (b) and (c) awaits financial closure. Once complete,
SGR is expected to boost the rail and road transported port
shipments from the current 16.0% to about 35.0%.
The Kenya Pipeline Company (KPC) has also embarked on an
aggressive plan to devolve Kenya’s pipeline network to the
counties by 2025. Ongoing projects include the replacement
of the 450Kms Mombasa-Nairobi pipeline, construction of
additional storage tanks at the Nairobi Terminal with
cumulative storage capacity of 133.5 MN litres and the
installation of additional loading facilities at the Eldoret
depot. Pipeline projects include replacement of the 121 Kms
24
Sinendet-Kisumu pipeline to be commissioned tentatively in

1H17 as well as the construction of the jetty of Konza’s oil
terminal.
Tanzania made a USD 2.3 BN allocation to infrastructure
development in 2016/17, with a 50.0% dedication to
transport infrastructure. Key infrastructure projects include
the 2,561Kms standard gauge railway stretching from Dar-
es-Salaam going west as well as 2 supplementary railways
venturing south and north, construction of the Tanga and
Bagamoyo ports, the 542Kms natural gas pipeline from
Mtwara and a 1,200Kms Tanga-Albertine region oil pipeline.
Uganda has embarked on a USD 11.0 BN infrastructure
program between 2015 and 2025, to be implemented
through government investment and PPPs. Currently,
Uganda’s allocation to infrastructure development averages
at 32.8% of its annual budget, with USD 1.1BN expected to
be channelled towards improving transport infrastructure.
Key projects include construction of the new Kampala port,
redesigning of the Malaba-Kampala railway into a standard
gauge line, upgrading of the Entebbe international airport,
25
construction of the Tanga-Arusha-Musoma railway line

among others. 2 ongoing projects, Karuma and Isimba dams,
have however been halted due to quality related issues. It is
therefore possible that the influx of cement producers into
the region is for the sake of providing high strength cement
that commands a premium to 32.5 grade OPC typically used
in the retail space.
 Clinker production:
In 2012, East Africa’s split between imported clinker and
locally manufactured clinker stood at 43:57, suggesting a
regional clinker shortfall. Over the last 3 years, the rapid
regional capacity expansion has majorly been on grinding
capacity. Based on estimates, the ex-port price for clinker
imports from 3rd party Middle East and Asian suppliers to
East Africa is estimated to be approximately USD 80.50,
commanding a 56.9% premium to our estimated in-house
cost of clinker production.
It is the opinion that compressed margins arising from
regional space stagnation has influenced cement producers
in the region to adjust their clinker: cement ratio below the
26
ideal 90%-95% towards the estimated global average of

81%. It is estimated that the regional cement producers
source clinker with calcium silicate (impure limestone)
content closer to the minimum 67% required, therefore
enjoying a slight ease in margin compression from lower
clinker FOB price negotiated. The lower clinker FOB price,
coupled with lower global freight charges stemming from
low global oil prices, further offers a slight cost ease to
clinker importers. Out of the 17 cement players in the East
Africa Region, only 2 players are clinker self-sufficient.
Competition & Price Undercutting:
Cheap imports from Asia have notoriously found their way
into the East African region through the Kenyan and
Tanzanian ports, further contributing to the oversupply
situation. More so, certain cement imports that transited
through Zanzibar ended up in Dar es Salaam without
attracting the necessary import duty, further distorting
cement prices. Within the region, cement producers appear
to employ penetration pricing, before gradually raising ex-
factory prices to match the market as was noted in Tanzania
27
in 2016. This progressive cement supply has resulted in

price stagnation of retail centric cement in Kenya, and
Uganda at USD 110.00 and USD 130.00 while Tanzania’s
prices have slumped to USD 80.00 in 2016.
In order to curb cheap imports, COMESA’s Common External
Tariff (CET) on cement was increased to 35.0% from 25.0%
in 2015. A new VAT imposition in Tanzania in line with the
destination principle will ensure cement that lands in
mainland Tanzania-whether directly sourced from Asia or
transiting through Zanzibar, will attract VAT at the point of
destination, and therefore its implementation will be key in
evening out the playing field.
In Uganda, excise duty on imported cement is set to increase
by 93.3% to USD 5.8 per Tonne, to reduce cement imports.
While the current cement prices have reached a floor, there
is a downside risk in slight cement price dips in northern
Kenya, due to the commissioning of Dangote’s 2.5 MN Tonne
cement plant in Ethiopia, bearing in mind the cement will
not attract a 35% CET. Dangote’s ordinary Portland cement
retails at approximately USD 74.00 per Tonne within the
28
outskirts of Addis Ababa, a 48.6% discount to Kenya’s

average market price. In the fight for volume market share,
outbound logistics has become a critical success factor in the
region, leading to the rise and dominance of “super” cement
distributors in the region. Notably, the threat of super
distributor poaching is high among emerging cement
producers, creating a downside risk potential to poor route-
to-consumer channels as certain cement producers have up
to 80%-90% reliance on 5-6 cement distributors.
Distributor bargaining power has therefore grown rather
significantly over time to see them negotiating up bulk
discounts and extended credit periods, further squeezing
margins and increasing the working capital demands of
cement producers and straining cash flows. Should average
ex-factory discounted prices hit below USD 85.00 within the
region, thin margins coupled with cash flow constraints
might result in consolidation of several cement
manufacturers, more so those with more than 50.0%
reliance on imported clinker from 3rd parties.
3.3 Target Market
29
We intend to focus very narrowly on the market of Rwanda,

Eastern DRC and western Uganda. Infrastructural projects
within this area are expected to increase substantially,
especially with the strong infrastructural growth in Rwanda.
The other key target market is the Eastern DRC served
through the town of Goma. With the forthcoming
presidential elections in December, 2018, there is strong
optimism that relative peace and stability will be ushered in
with a new presidential leadership and government. This
will result in significant increase of internal financed
infrastructural projects in the Northern Kivu province of
DRC, for example roads, dams, airports, and real estate
developments. From the statistics of cement importations
into DRC through Goma town, we are confident that the
projected demand will be large enough to uptake our
production in the next 10-15 years.
30
Cement price surges in land-locked African countries crying out for construction materials
are not new but it’s always illuminating to review how the situation is changing. Rwanda’s
sole 0.6Mt/yr integrated plant is run by Cimerwa, a subsidiary of South Africa-based PPC,
near Bugarama in the south-west of the country, close to the borders with Democratic
Republic of the Congo (DRC) and Burundi. PPC’s operation in Rwanda has performed well
in comparison to a poor market back home in South Africa. For its financial half year to
September 2019 Cimerwa reported revenue growth of 28% year-on-year to US$31.2m due
to a 20% increase in sales volumes. Earnings rose even more in percentage terms due to
higher volumes and an improved cost per tonne performance, likely due to a
31
debottlenecking project. More recently, PPC said that its

operations in Rwanda were disrupted in April 2020 due to a
coronavirus lockdown that started in late March 2020. It
partially resumed operations in the second half of April 2020
with cement sales volumes for the month expected to be 15 -
20% of those in April 2019. The other point of note is that
the Rwandan government was trying to sell its minority
share in Cimerwa in mid-2019 but nothing has been publicly
announced since then. However, Cimerwa was reported as
being in the process of listing on the Rwanda Stock Exchange
in May 2020.
Rwanda’s cement consumption has been reported to be
0.7Mt/yr so a new combined national production capacity of
1.4Mt/yr seems likely to create significant exports. Other
countries in the region have also noticed what’s going on in
Rwanda and want to do likewise. In June 2020 DRC’s
Industry Minister Julien Paluku talked up plans of reviving
the 0.3Mt/yr state-owned National Cement Plant (CINAT) in
Kimpese. He noted that DRC has been partly reliant on
cement produced by Cimerwa in Rwanda, which has been
32
serving a combined demand of 900,000t/yr in DRC and

Burundi.
A statistic that received a fresh airing this week was one
from the World Bank in 2016 that worked out that the price
of cement in Africa was on average 183% higher than the
global average. It popped up in a news article about the
expanding Nigerian cement industry but it applies to the
whole continent. While it continues to hold true, exports will
boom and plants will keep being built in the places that
exports can’t reach.
3.4 Customer Needs
Traditionally, customers in the cement markets have been
overwhelmingly concerned with the following need;
 Brand Image
 Quality
 Packaging
 Price
 Discount
 Colour
 Availability
 Rate of strength
 Non-reactivity
33
Another emerging and significant customer buying factor is

the company corporate social responsibility engagement and
commitment to global environmental and sustainability
agenda, especially Climate Change.
Our company intends to strategically focus on these needs
and use them to leverage and quickly build a significant
market share.
3.5 Buying Decisions
The customer’s perspective of the cement product relative
success or lack of success for other customers plays an
important role in the decision-making process. Customers in
this market feel very nervous about purchasing a cement
product that they do not feel have been widely adopted. At
the same time, they are more likely to buy a cement product
just because others have already purchased the product. For
many customers, their feeling about the cement product’s
relative acceptance and success plays a more important role
in their decision making.
Customers are also increasingly expecting to get a “special
incentive” to make the buying decision. And the more special
34
incentives are offered, the more buyers seem to expect them.

Special incentives that buyers seem to respond best to
include price discounts.
4 COMPETITIVE ANALYSIS
4.1 Industry Overview
Customers do not switch suppliers often and tend to be
relatively satisfied with their current cement brand(s). The
strength of the relationship between customer and cement
35
brand plays just as important a role as any other factor such

as features, pricing, performance, etc.
The general market that we intend to serve of East Africa
cement is of course a huge and complex industry about
which there are large amounts of information available from
many sources. But because we are specifically targeting a
very limited part of the market, we will limit our focus to this
market segment. The East Africa cement market is
characterized by a growing level of competition.
The respective cement brands are presented below:
The cement companies in East Africa are the following as

below:
36
4.2 Nature of Competition

Companies strive not only to build relationships with the
market players, but also to emphasize how strong and
37
beneficial a long-term relationship with them will be. The

emphasis is on selling not only a particular product or
service, but the whole company. Often extra intangibles such
as company loyalty are emphasized to show that the value of
the whole relationship is greater than the sum of the actual
cement product that are being sold.
Cheap imports from Asia have notoriously found their way
into the East African region through the Kenyan and
Tanzanian ports, further contributing to the oversupply
situation. More so, certain cement imports that transited
through Zanzibar ended up in Dar es Salaam without
attracting the necessary import duty, further distorting
cement prices. Within the region, cement producers appear
to employ penetration pricing, before gradually raising ex-
factory prices to match the market as was noted in Tanzania
in 2016. This progressive cement supply has resulted in
price stagnation of retail centric cement in Kenya, and
Uganda at USD 110.00 and USD 130.00 while Tanzania’s
prices have slumped to USD 80.00 in 2016.
38
In order to curb cheap imports, COMESA’s Common External

Tariff (CET) on cement was increased to 35.0% from 25.0%
in 2015. A new VAT imposition in Tanzania in line with the
destination principle will ensure cement that lands in
mainland Tanzania-whether directly sourced from Asia or
transiting through Zanzibar, will attract VAT at the point of
destination, and therefore its implementation will be key in
evening out the playing field.
In Uganda, excise duty on imported cement is set to increase
by 93.3% to USD 5.8 per Tonne, to reduce cement imports.
While the current cement prices have reached a floor, there
is a downside risk in slight cement price dips in northern
Kenya, due to the commissioning of Dangote’s 2.5 MN Tonne
cement plant in Ethiopia, bearing in mind the cement will
not attract a 35% CET. Dangote’s ordinary Portland cement
retails at approximately USD 74.00 per Tonne within the
outskirts of Addis Ababa, a 48.6% discount to Kenya’s
average market price. In the fight for volume market share,
outbound logistics has become a critical success factor in the
region, leading to the rise and dominance of “super” cement
39
distributors in the region. Notably, the threat of super

distributor poaching is high among emerging cement
producers, creating a downside risk potential to poor route-
to-consumer channels as certain cement producers have up
to 80%-90% reliance on 5-6 cement distributors.
Distributor bargaining power has therefore grown rather
significantly over time to see them negotiating up bulk
discounts and extended credit periods, further squeezing
margins and increasing the working capital demands of
cement producers and straining cash flows. Should average
ex-factory discounted prices hit below USD 85.00 within the
region, thin margins coupled with cash flow constraints
might result in consolidation of several cement
manufacturers, more so those with more than 50.0%
reliance on imported clinker from 3rd parties.
4.3 Industry Changes
As this industry continues to grow and become increasingly
complex, companies are forming strategic alliances.
Common strategic alliances are between firms that between
the cement manufacturers, contractors, real estate
40
developers, logistics providers, distribution companies, and

commercial banks.
More and more customers are looking for one stop provider.
This gives a huge advantage to firms that offer an extremely
broad array of construction services, but a disadvantage to
those that don’t.
The number of cement players increased from 16 in 2013 to
19 in 2016, to see a 3 year CAGR in installed grinding
capacity of 17.1% to 21.1 MN Tonnes in 2016E. We therefore
estimate a 341 bps dip in actual regional utilization rate to
58.0%, translating to regional y-o-y production growth
forecast of 9.3% to 12.8 MN Tonnes in 2016E. The significant
y-o-y dip in utilization rates is courtesy of the
commissioning of Dangote’s 3.0 MN Tonne plant in Mtwara,
Tanzania which resulted in a 15.7% y-o-y increase in
regional installed grinding capacity in 2016.
Despite the obvious grinding capacity surplus, there have
been several announcements concerning potentially new
cement entrants as well as existing cement producers
ramping up capacity.
41
 In Uganda, the construction of Kampala Cement’s 0.8

MT grinding plant is ongoing
 The government of Uganda in partnership with Moroto
Ateker Cement plans to build a cement plant in
Karamoja, Uganda. The feasibility study of the plant is
complete and the plant will be constructed in 2 phases.
 Hima Cement plans to double its grinding capacity to
1.6 MN Tonnes by building a grinding plant in Tororo
district, Uganda (expected to be completed in 2018).
 In Tanzania, the recently commissioned Dangote, ARM
Cement and Tanga grinding plants in 2015/16
collectively increased Tanzania’s installed grinding
capacity by 4.5MN Tonnes.
 Lake Cement plans to build a 1.4 MN Tonne grinding
plant in Bagamoyo, with construction to start mid-2017
and the plant is to be tentatively commissioned in mid-
2018.
 EAM, Mamba and Sungura companies are also planning
to venture into the Tanzanian cement landscape.
42
 EAM Company and Sungura Cement plan to construct a

3.0 MN Tonne and 1.0 MN Tonne plants respectively (in
Tanga) with EAM expressing its focus on exports and a
possibility of ballooning its production capacity to 7.0
MN Tonnes, should the government agree to its ex-
porting terms.
 Mamba Cement plans to build a 1.0 MN Tonne
integrated plant in Bagamoyo, Tanzania.
 All 3 potential cement entrants are in discussions with
the government of Tanzania concerning the terms of
operations.
 In Kenya, Savannah Cement has announced plans to
double its Athi River grinding plant capacity to 2.4MN
Tonnes. Inauguration of the additional capacity is set to
be in mid-2018.
 Cemtech Sanghi is also said to finally construct a 1.2 MN
Tonne plant in West Pokot after an extended delay
period from 2010.
43
 Bamburi Cement is also planning to increase its capacity

by 0.9 MN Tonnes in Kenya to keep up with its cement
demand.
In light of the aggressive capacity expansion underway, the
region’s capacity surplus will result in sub-optimal
utilization rates, hence rising OPEX and compressed margins
among cement producers, especially given the region’s price
stagnation. It is forecast a decline in regional utilization rates
MN Tonne increase in installed capacity in 2018. This is
9.7% to 15.5 MN Tonnes in 2018F.
Although Tanzania has seen a rapid increase in installed
capacity due to an abundance of limestone, natural gas and
coal deposits, the market demand growth has not absorbed
this. This could therefore result in several planned capacity
addition plans in Tanzania being shelved, given that the
current utilization rates are issuing warning signs of
possible consolidations in the medium term, as evidenced by
44
3 cement plants who are currently operating on an ad hoc

basis in Tanzania. Certain planned projects are however
strategically intended for the larger infrastructure projects
expected in the near future, rather than for the sake of
securing/growing market share in the already saturated
retail market.
4.4 Primary Competitors
Our primary competitors in Rwanda are the CIMERWA
cement which is the dominant market leader with a 50%
market share and the Prime Cement Ltd which is under
construction and expected to start operation in 2020.
The other key competitors are the major cement importers
to Rwanda and DRC and they are Hima Cement (In Uganda),
Tororo Cement (in Uganda), Tanzania Portland Cement (in
Tanzania) and Dangote Cement (in Tanzania).
Their major competitive strengths are low pricing,
availability and advertising visibility and their strong
corporate capability.
4.5 Competitive Products
Based on an evaluation of the Rwanda, Eastern DRC and
western Uganda cement sub-market, customer needs and
45
current competitive offerings, we feel that there is an

unfilled need for a cement manufacturing company to be
located at the North-western region of Rwanda or the
Eastern region of DRC. This cement manufacturer would be
particularly desired by customers due to the proximity to
the cement plant resulting in a lower pricing, and better
product availability.
4.6 Opportunities
After reviewing the currently available cement supply and
demand in this market segment, it is apparent that the key
suppliers are established distributors who are offering the
product at a high retail price. Their key excuse is that they
are recovering the high transportation costs. There is
therefore a distinct need to locate a cement plant within this
region to allay this high cement pricing and unreliable
supply at the mercy of weather, political, logistical
conditions during the transportation of the cement from the
distance located cement plants. This is the market
opportunity we will be cashing on.
46
4.7 Threats
The company faces the risk of competing with much larger,
better entrenched competitors. These firms have established
and commanding market shares, large advertising budgets,
large sales force, established relationships with customers,
and tremendous financial resources. We hope to offset this
risk by offering a low priced product with a strong brand
proposition which emphasizes on improving the livelihood
of the local communities and the championing of the
environmental conservation programs and initiatives on the
Virunga ecosystem.
It is possible that one or more existing competitors will react
to our entry into this market. Because of their established
market positions, a strong competitive reaction could be a
formidable threat. The competitive reactions that would be
most threatening would be a hostile buyout or a hostile price
war.
47
5 STRATEGY
5.1 Key Competitive Capabilities
Our key competitive advantage lies in our brand proposition
of the conservation of the Virunga ecosystem and protection
48
of the Virunga Gorilla. The other key competitive advantage

are the proposed plant location within the target market.
Our affiliation and partnership with the Virunga ecosystem
conservation organisations for example, the VIRUNGA
ALLIANCE will give us a significant advantage. This
affiliation allows us to appeal to the local communities and
investors working in this market. We will contribute to the
financial support of the conservation efforts and
consequently ride on the global marketing and advertising
campaigns.
5.2 Key Competitive Weakness
Being a new business competing with largely against
established firms has huge disadvantages for us. To
significantly build sales, we must find new customers.
Having no sales we have no income stream. To be taken
seriously as a new firm, we intend to take the following
steps; i) enter into strategic partnerships with the key
cement industry players (for example, the contractors, real
estate developers, governmental organisations involved in
infrastructural development projects (roads, dams, airports,
49
etc.), ii) develop a unique marketing model with the Virunga

ecosystem conservation organisations and governmental
agencies, iv) conduct an aggressive marketing and
advertising campaign.
5.3 Strategy
Our strategy will be built around the new trend in the E.A.
cement industry. We will adopt a strategy informed by a
research conducted in 2013. On the influence of Brand
ideals on sustainable growth in the Kenya Cement industry.
The study findings revealed that:
The major players in the cement manufacturing industry
have made a deliberate effort to create brand ideals through
designing and communicating messages which depict them
as aware of human fundamental values. Albeit the evidence
is minimal and cannot be generalized across the cement
industry, findings of the study are consistent with other
study findings on the influence of brand ideals to growth. It
is very clear that there is a significant relationship between
the use of brand ideals and market share retention,
customer loyalty and the resultant growth therein.
Consumers seem to respond, however subconsciously, to the
50
key industry players efforts of using brand ideals. Their

loyalty and willingness to recommend their brands to others
is clear evidence that brand ideals plays and will play a
major role in ensuring sustainable growth in the E. Africa
cement industry players. From the study, a culture of brand
ideals seems to be the key to market survival once the prices
stabilize. Currently the threat of selling and competing on
price remains the biggest challenge to the industry
especially to those currently having ideals in their culture.
The study recommended that the following:
Cement companies should create and align brand ideals with
their organizations. When a brand ideal is at the heart of a
business, it serves as a light from within that guides every
decision of the leaders and employees in every department,
from human resource to finance to marketing to product
development. Brand Ideals should be used to help shape a
business and organization in three distinctive ways. First,
ideals should be used to lead to the creation of more
meaningful products, services, and customer experiences.
Second, ideals should be used to align the organization and
51
its culture behind a common purpose. And finally, ideals

should be used to lead companies to rethink the way they
engage and communicate with consumers. Brand Ideals
should be inculcated to move companies beyond selling and
telling consumers what to do to inviting them into dialogue.
The brands that will survive and thrive in the decades to
come will be those that are based on ideals, because in
changing times and challenging circumstances, a brand ideal
serves as a beacon.
We will respond to this trend by identifying strong brand
ideals which resonate with the customers and potential
customers. By being the first company to take this step, we
will be seen as a progressive leader, on the cutting edge of
change, looking for new ways to serve customers, and do
business better. We will also pursue strategic relationships
with companies that are market leaders in the cement
industry. This will give us the advantage of affiliation.
5.4 Implementing Strategy
Because we are competing in a marketplace and industry
where fast and dramatic change is the norm and not the
52
exception, we will evaluate the success and effectiveness of

all aspects of our strategy on an on-going basis. It is likely
that minor aspects of our strategy or product positioning
will change frequently, and it is likely that we will make
significant changes in our strategic direction from time to
time. To promise that our strategy will be static or that it will
ideally suit fast changing market conditions would not be
appropriate. Similarly we are going to take pragmatic
approach to implementing our strategy for the particular
products, services, marketing programs, etc. At the same
time it is the rapidly changing dynamics of our marketplace
that make strategy extremely important, and we intend to
give the strategic process and its implementation the
importance that it deserves.
53
6 PRODUCTS & SERVICES

6.1 Description
54
Our primary product offering is the cement under the brand

name of “TO BE DECIDED”.
The cement brand is to be manufactured at the proposed
EASTERN CEMENT LTD plant to be located within the
Rwamagana District of the Republic of Rwanda. The plant
construction is expected to commence in January 2022 and
production to commence in January 2023.
The proposed product development milestones are
presented below:
CRITICAL PATH ACTIVITY MILESTONE
INVESTOR CONFIRMATION APRIL - SEPTEMBER

2021
BUSINESS PLAN UPDATE 1 MONTH (OCTOBER
2021)
EPC CONTRACTOR 1 MONTH (OCTOBER
PROCUREMENT 2021)
PLANT DETAILED DESIGN 3 MONTHS (OCT.-
DEC. 2021)
REGULATORY 3 MONTHS (OCT.-
PERMITTING(Including EIA) DEC 2021)
55
CIVIL WORKS CONSTRUCTION 10 MONTHS (JAN.

& EQUIPMENT ORDERS 2022 – OCT. 2022)
PLANT COMMISSIONING & NOV. 2022 –DEC.
HANDOVER 2022
PLANT LAUNCH JANUARY 2023
What is particularly unique about our product is the brand

proposition. EASTERN CEMENT will be the only cement
brand with environmental conservation (Virunga
Ecosystem) as its core Brand proposition. This will be
important to our target market whose economy is strongly
dependent on the tourism and related industries for survival
and developmental growth.
6.2 Positioning
We will position our product as a cement which offers all the
expected cement performance as specified in the East Africa
cement standard: EAS 18-1: 2001 whilst supporting the
Virunga ecosystem conservation efforts. Appendix E
presents the cement specification. We will target this part of
the market exclusively and develop a reputation as a leading
provider in this market niche.
56
Our product will be 100% focused on the target sub-market

(Eastern DRC and Rwanda) and the product will be
positioned and marketed as the quality and cost effective
cement for this market. Our product will be positioned by
our affiliation with the Virunga Ecosystem conservation
initiatives. We will reflect this affiliation in our product
brand name, advertising and in cross promotions with the
affiliated organisations.
6.3 Future Products
We aim to launch new products, for example ready-mix
concrete, concrete paving blocks, and other cement-based
products that will significantly boost our revenues. By
launching this new concrete products we hope to achieve
vertical integration of the cement we will manufacture.
57
7 SALES & MARKETING

7.1 Marketing Strategy
58
Our basic marketing strategy is to offer a cement product

that will allow the customers to take part in the
environmental conservation initiative and programs of the
Virunga Ecosystem.
Our marketing message will emphasize:
“BUY EASTERN CEMENT – CONSERVE THE VIRUNGA
ECOSYSTEM AND SAVE THE VIRUNGA GORILLA.”
The message that we want to send to our customers is
that “buying EASTERN Cement is a responsible decision.
We will primarily direct our marketing toward the
contractors, real estate developers, infrastructural
developers and individual builders. We will largely rely upon
our brand promotion and incentive offers to drive sales
ahead. The overall direction of our marketing is to support
the positioning of the company’s products and services and
to rapidly open new accounts. We shall achieve this by a
cohesive marketing program that emphasizes our product’s
unique benefits plus an aggressive sales effort.
7.2 Sales Tactics
59
We will rely on our unique agency model to get our product

to market. We plan to have strategic partnerships with the
target market existing and potential customers and industry
players. The advantages of cement distributors are many.
For one, they have their own established sales forces and
regular access to key customers. They have a large number
of established accounts and customers do not have to go
through all the paperwork of setting up a new vendor to buy
our product. Also, we do not have to collect payment from
each account we deal with-only from the distributors.
We will develop a strategic partnership with the cement
distributors to sell our services. They will recommend and
sell our service to their members. In exchange we will allow
them attractive discounts. These will be a non-exclusive
agreements and the terms will be open-ended.
7.3 Advertising
60
The primary advertising vehicles that we will use are; the

local newspaper, local television, radio, social media, etc.).
Our advertising program can best be broken out by target
market, trade consumer and cement product line.
7.5 Publicity
We will hire a PR/advertising firm to handle our entire
publicity effort. We will work closely with them and monitor
every step of the process.
61
8 OPERATIONS
8.1 The Cement Plant
EASTERN Cement Ltd proposes to install and operate a new
cement grinding plant in Rwamagana District of Rwanda,
using imported clinker and gypsum and locally mined
pozzolana as raw materials. The installed cement
production capacity of the plant is 350,000 tonnes per year.
The new plant will be built according to the Best
62
Available Technologies (BAT) defined for the cement

industry and adopting the stringent EU environmental
standards. The project infrastructure will include but not
limited to the following:
 Cement Plant Infrastructure:
Setting up a Cement Plant in a given location and running it
there requires many infrastructural facilities such as
transport and communication, power, water, labour force
etc. Therefore all other factors being comparable, the site
which has better infrastructural facilities, would be
preferred.
There would hardly be a place where all necessary facilities
would be available in quantities required. In almost all cases
the plant would have to add and create some facilities that
are lacking.
Availability of infrastructural facilities like, a railway link or
a highway or a sizeable substation in the vicinity can reduce
capital costs substantially and also running costs. A sizeable
City/town would almost certainly have basic amenities like
primary and secondary schools, hospital /dispensary,
63
market for daily needs of employees and facilities for

housing. To that extent the company would have to spend
less on creating facilities for colony, schools, hospitals and
shopping.
Rail Links
Vicinity of the Market for cement is a highly desirable
feature for any cement plant of any size and located
anywhere. However, 'vicinity' has different connotations for
small and large plants. For small plants, Markets may fall
within a 200 km radius and for large plants, the radius could
be 500 km or more. As time goes and competition grows,
cement plants would have to go further and further to sell
their product. Therefore a railway line or a highway
becomes a very vital link between the factory and the
market.
Though in the early days many a cement plant was located
right on the railway line, it is unlikely that this could happen
in future. A railway siding or a feeder road would be
necessary to connect the plant to the main line or highway.
Road Links
64
In the last couple of decades, quite a number of plants have

come up without rail links. These plants depend entirely on
road for receipt of materials and for dispatch of cement.
Road Links would therefore assume even greater
importance in future. Feeder roads must be good, all
weather roads, either tarmac or concrete as they have to
carry heavy truck traffic that would only grow with passage
of time. The proposed location would have to be examined
from this point of view. The available links should have
sufficient capacity to cope with addition to traffic of the new
plant and likely additions in future.
Assuming that the highway is about 15 km from the plant, a
feeder road of 15 km would be necessary for trucks to ply on
it to dispatch cement. It would therefore be seen that as
plant capacity increases the density of truck traffic measured
in trucks per hour increases. It would require a good heavy
duty all weather minimum 2-1ane road to bear this traffic
for a plant of 3000 tpd capacity alone and wider for plants of
4000 tpd capacities.
65
Further if the feeder road passes through a town or a sizable

village, road within the township literally falls in no man's
land. The town is expected to construct and look after roads
in its area. In most cases they have no funds and hence roads
within city /town area are largely in bad condition and too
narrow to handle the heavy truck traffic.
Further passing through a populated area slows down
movement and increases risks of accidents to human beings,
animals, etc. Hence it would be most desirable to 'bypass'
such towns. This imposes additional burden on project costs
but it is worthwhile.
Power
All pertinent information on Generating Stations, major
substations and transmission lines, their routes and
capacities should be obtained from the government
Electricity Boards and their agencies. The Central Grid
should also be looked into. The surplus capacity available,
should also be ascertained and also plans for addition to
capacity in the pipeline and on drawing board should also be
ascertained.
66
As a thumb rule, (though in actual practice the plant would

consume less than 90 Kwh in producing 1 ton of cement), it
may be assumed that specific power consumption for a large
or 1 MTPA size plant would be 100 kwh/ton of cement.
Thus a million ton plant or a 3000 tpd capacity plant would
require 3000/24 x 100 = 12500 KWs or 13750 KWs with a
design margin of 10 %
Considering a power factor of 0.95 and a load factor of 0.80,
power required in KVA rating would be 18100 KVA.
Allowing a capacity margin of 25%, the KVA capacity of the
substation required would be 22700KVA or say 23 MVA.
Cement plants install captive power plants of between 30-40
% of their requirements. This should be ignored while
contracting power from the grid.
For such capacity, the power would be delivered almost
certainly at 132 KV in grid transmission lines and hence
routes of such lines and also locations of major substations
and their capacities should also be found out. It would be
perhaps necessary to string a new transmission line of 132
KV of sufficient capacity especially for the new plant from an
67
existing substation. In such cases it would be prudent to

assume that plant capacity would be doubled and hence both
substation and line should be designed for this capacity i.e.,
46 MVA for a million ton plant.
Water
It is necessary to identify a perennial source of water like a
river or a stream for the plant and the colony for its
operation and for human consumption. Wells would be dug
in river or stream bed and water pumped from them to the
plant where it can be stored in ground level or overhead
water tanks. The requirement of water depends on the
process and machinery employed and size of the plant.
Per se "Dry process" does not require water for the process
of making cement. It requires water for cooling of bearings;
compressors, blowers, DG Sets and such machinery. Cooling
water can be recycled. It is collected and led to a cooling
pond or cooling towers and then pumped back for cooling
again.
However, such 'recycling' requires that water is soft and free
of suspended matter. If water available is naturally hard, a
68
water treatment plant would be a must. If the plant proposes

to use ESP for cleaning exhaust gases of raw mill and kiln
system, it would require substantial quantities treated water
to condition the exhaust gases to bring down their
temperature and to improve their humidity. This water is
totally lost. It is in principle feasible to collect waste water
from houses and treat it and re-use it. But this is hardly done
on account of 'prejudices'. But it could be at least used for
gardening and other non-potable uses.
Manpower
One of the most important factors of production is human
resources. The productivity of Cement Plants has steadily
increased and man hours per ton of cement produced have
steadily gone down. Though developing countries are still
using more man hours compared to plants in advanced
countries, the new plants coming up in the country are
nearing these norms.
 Main reasons for reduction in manpower requirements
are:
 (i) Mechanized operation of quarries.
69
 (ii) Mechanized material handling within the plant.

 (iii) Semi mechanized operation of wagon and truck
loading in case of bagged cement – mechanized or even
automated 'bulk loading'.
 (iv) Automated and microprocessor based process control
in which the machines can be started /stopped from a
central location and from where performance can be
watched and monitored. Therefore, machinery
'attendants' are now conspicuous by their absence.
 (v) Automated sampling and testing techniques in
laboratory.
 (vi) Computerized accounting and recording systems.
Thus even a mtpa and higher capacity plant would now
require a work force of about 300 or less all-inclusive.
These changes have however necessitated higher
educational qualifications and training of personnel required
to run the plant. Unskilled workers are now needed only or
unloading of coal wagons, etc., and for menial work like
house-keeping. Even 'semi-skilled' workers like machine
70
attendants samplers, 'oilers' 'greasers' are required fewer

and fewer.
The number of 'skilled and trained' workers, who
'understand' process and are 'computer literate', has
increased. This means a minimum school/college level
education / IT training / to be supplemented by 'Specific on
job training' as per the need of the job is necessary at all
levels.
It is a good idea to obtain the operating personnel at junior
levels from the surrounding area. They have their roots and
are likely to be more permanent. The turnover could be less.
This also solves 'language problem', which is an important
factor in a large multi lingual countries.
The personnel in senior levels could be drawn/recruited
from the Industry by providing better remuneration and
perks and of course housing. It is sometimes very difficult for
a cement plant to recruit skilled personnel from outside if
infrastructural facilities like educational facilities and social
amenities are not available locally. The vicinity of a town I
village can be a blessing in more than one-way.
71
 (i) It provides personnel with basic training and

education.
 (ii) It may not be necessary to provide housing facilities
for all.
 (iii) It may not be necessary to provide for 'schools and
hospitals' facilities except by way of minimum.
However vicinity of a town/city/village can be a 'nuisance'
also. Deviations in clean air norms would be magnified out of
proportions and pressures brought on the plant to keep the
ambient air clean. Sometimes, such pressures turn into ugly
agitations and in interrupted production.
Social Amenities
Among the social amenities would come market facilities for
daily needs of the staff. A large market for vegetables,
provisions, milk, dairy products, cloth and consumer goods
would go a long way for happiness of the employees.
Otherwise responsibility falls on the plant to provide for
such facilities. Some plants do run co-operative dairies and
stores to meet daily needs of its employees.
72
'Hospital' facilities in the vicinity could be a great blessing, as

they would come in handy for emergencies till better
treatment can be arranged for. Posts and ATMs and Banks
are other necessary social amenities. Mobile phones have
brought in a sea change in communications. Satellite TV has
greatly made up for 'entertainment'. Almost all plants now
install dish antenna and provide Cable TV for the inmates of
the colony. TV also has the virtue of making people feel part
of the society at large and not cut off or isolated.
Cement Plant Capacity Sizing

Factors Governing Size of a Cement Plant
Size of the Cement Plant is governed largely by:
1. State of development of technology.
2. Size of market.
The two are related and influence each other. An assured
and expanding market spurs development of technology so
as to meet demands of market. A large size plant would
generally mean a more efficient plant in terms of fuel
73
consumption, power consumption and manpower

requirements.
When a product is not required to be tailor made and when
market is large, like cement, large sized plants would afford
economies of scale. Advantages of increased sophistication
would be better realized in large plants.
Total Capacity in one Place and Size of Single Productive
Unit
Size of a plant in terms of total capacity in one place and size
of a single productive unit have regional and geographical
overtones in addition to advances in technology. For
instance, USA and European Countries have been always in
the forefront of cement technology, and yet the size of a
single unit has not exceeded 5000 tpd capacity even with
pre-calciners. On the other hand, in Japan, 3000 tpd capacity
would perhaps be the smallest. A great many plants have
single units between 8000 to 10000 tpd capacity. USA is a
vast country with extensive deposits and extensive markets.
To have a few very large plants would mean very long hauls
for transporting cement by road and rail to reach markets. It
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is advantageous to have a large number of smaller plants

spread over the country. In Japan on the other hand, there
are narrow islands with short overland transport. Transport
is convenient and economical by sea. Hence a small number
of large plants are more suited for that country.
Optimum Size of a Plant
Optimum size of a plant is not a fixed entity. It will vary with
time, as it is influenced by costs of raw materials, fuel, power
and labour. For the same country optimum size would tend
to go up with passage of time. At the same point of time,
different countries would have different optimum sizes.
Specific cost of production tends to decrease with increase in
size of plant. The relation becomes asymptotic in that there
is a limiting cost even for very large plants.
Size of Plant and Limestone Deposits
Apart from the above, size of plant at a given site would also
depend on size of deposits and their accessibility. Life of a
cement plant is generally taken to be about 30 years.
Therefore large plants would need correspondingly large
reserves. In any country there would be areas with 'massive'
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deposits that could support large plants. But there would

also be 'small' deposits that would be suitable for small
plants only.
Cement Plants for Specific Purposes
Accessibility of deposits also governs size of the plant.
Deposits in hilly and inaccessible areas are difficult to
exploit. Reaching markets is also difficult in such locations.
Sometimes cement plants are set up for a specific purpose
like for supplying cement to a large dam project or for roads
in border areas to meet needs of defense. Such plants will
have 'short' lives and hence they would have small capacity.
Economics of Scale
Because of economies of scale, installation costs tend to
come down as size of plant increase and cost of production
also tend to go down, raw material costs remaining about
the same. Labour costs go down because of increased
automation. Thus relative proportions of elements of costs
also change with size of plant.
The net realization is the difference between sales price and
various costs. Artificial regulation of sales prices (as it
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happens in controlled economy) pushes up the size of the

viable plant. In free economy small plants can also be viable
but only in specific cases.
Since sales price is the same in a given market at a given
point of time for all plants, large or small, it stands to reason
that large plants would earn more profits. Hence for this
reason also trend will be to install larger and larger plants.
Civil Engineering Design
Plant should be entrusted to a reputed company specialized
in the design of structures, and buildings commonly found in
cement plants. Apart from main factory buildings and
storages, civil construction also includes:
1. development of land - levelling thereof for plant, railway
siding and colony, 2. planning and laying of roads in plant
and colony, 3. drainage in plant and colony, 4. periodical
laying of refractory in kiln, 5. design and installation of main
water supply scheme, underground and overhead water
tank and water pipe lines in plant and colony, 6. developing
of green belts in and around plant, quarries and colony, 7.
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development of gardens and parks, 8. non-factory buildings,

administrative offices and colony.
Factory Buildings and Machinery Foundations
Cement machinery in general is among the heaviest
machinery in Industry with rotary kiln being the heaviest
and dimension wise longest single piece of machinery. With
increase in capacity of plant in terms of single kilns - sizes of
machinery have increased corresponding to capacities
required. For a short period, 2 ball mills were used for raw
grinding capacity.
Cement plants have perhaps the tallest structure in
Preheater towers in any Industry apart from chimneys. For
large capacities, 2 streams preheater are used, which reduce
height somewhat. But with number of stages increasing to 6
now, preheater towers as tall as 80-90 meters are to be
commonly found.
Storage silos for blending (Blending cum storage) are
designed for 15000-20000 tons capacity and diameters
ranging between 16-20 meters and cement silos of similar
capacities and sizes are other large civil structures.
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Clinker can also be stored in silos. More commonly it is

stored conical sheds with a central shaft; sheds are 60 to 80
metres in diameter and are totally covered.
Preliminary Investigations
Among the first things to be ascertained / obtained at the
proposed location of the plant are
1. Map of Contours of the plot showing levels, natural drains,
streams etc.
2. Load bearing capacity of the soil.
3. Depth of rock on which foundations can rest.
4. Wind velocities at different heights in the area. These are
important for tall structures like pre-heater towers and tall
chimneys.
5. Seismic zone of the area in which the plant is located and
hence the factors to be allowed for in the design of various
structures.
6. Underground water tables in dry and wet seasons.
Functional Design
The civil design of a structure has to be functional in the first
place. It must be designed to house the machinery in correct
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sequence and at different levels as required for flow of

material and gases being processed in the section, with ease
and without any impediment. It must provide well-designed
stable foundations for machinery, motors, gearboxes, etc.
Foundations must withstand static or dead loads and also
dynamic loads arising out of running of machines and
vibrations arising therefrom.
Rotary Kiln
The rotary kiln may be supported on 2 or more supporting
stations with each tyre resting on two rollers. Kiln is an
inclined rotating cylinder which tends to slide down, which
expands in hot conditions and which flexes at every
revolution under its own weight. Loads on rollers may not
always be uniform. Kiln may leave contact with one roller
altogether (for 2 support) or with more than one roller for 3
or more support kilns, thus subjecting other rollers to very
high loads albeit for short periods in each revolution.
Because of inclination, there are thrust loads along the axis
of the kiln.
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It is therefore necessary that detailed information on loads

under conditions - normal and abnormal – is obtained from
respective machinery manufacturers and passed on to civil
designers for designing kiln foundations.
Vertical Mills
In vertical roller mils, dead weight of mill itself is very large.
In addition there is a direct thrust load on the foundation.
During grinding mill also vibrates. Foundations for vertical
roller mill must be designed to take into account all these
factors. To spread the heavy loads on a wide area, the
foundations assume such proportions that their own weight
is several hundred tons, which also must be added to the
load on the soil. Load bearing capacity of soil is measured in
TI cm2. The base of foundation should be so designed that
the loads transmitted to soil in T I cm2 are well within the
load bearing capacity of soil (weight should include weight
of civil structures).
Building Design
Floor levels in a building are arranged to house machinery
and drives at different levels. Column spacing are arranged
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to facilitate taking the machinery into the building and for its
erection consistent with their impact on depths of beams.
Column spacing has a direct influence on depths of beams.
Depths of beams and sizes of columns determine clear space
for machinery. The different floors of the building can have
their own network of secondary beams to support the
machinery so that the load is in tum transferred to main
beams from them to main columns and down to the
foundations of column footings. Column footings are sized so
that loads transmitted to soil are within permissible load
bearing capacity of the soil.
Data Needed for Civil Design
Thus a civil designer needs to be furnished with a
departmental layout drawing which furnishes: 1.
Dimensions of the buildings. It is a universal convention that
building dimension is given in terms of centres of columns
and heights are reckoned from tops of floor levels, 2.
Locations of machinery with their outlines; their relative
centrelines in vertical and horizontal planes, 3. Over all sizes
and space occupied by machinery and connecting chutes and
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ducts in different views - plan, front and side elevations, 4.

Dead loads and dynamic loads, 5. Expansion tolerances, 6.
Entry and discharge points, 7. Layout of chutes and ducts in
the departments with their dimensions and orientation, 8.
Openings in floor with sizes and locations, 9. Access
platforms to be provided for, 10. Staircases and ladders and
landings for access between floors, 11. Maintenance
requirements like: (a) Storing and handling refractory, (b)
Lifting Heavy weights (rollers of mills), (c) Clear space
required for maintenance i.e., for removal of shafts, etc., 12.
Location for lift when provided, 13. Walkways for inspection
and corresponding ladders and platforms.
Foundations
Major foundations should be marked with benchmarks from
which levels can be measured. Foundations will have
marked on them, Centre lines of machines to be installed on
them - center lines will be marked in horizontal plane and if
need be also in vertical plane.
Foundations will have:
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1. Level surfaces which can be used for positioning and

levelling bed plates.
2. Marked routes / channels for installing oil lubrication and
water-cooling pipelines.
3. Pockets for foundation bolts of adequate size and depth.
Each building should have a 'benchmark' for reference from
which heights and distances within building and with
respect to other buildings could be measured.
Utilities
Civil designers should also be informed in advance about:
1. Routing of cables, within the building, whether they are to
be underground / overhead; whether they would be
concealed or exposed, 2. Piping layout for utilities, 3.
Lighting within and outside building, 4. Sides to be covered
for protecting machinery against wind/rain.
Underground Water Table
Underground water table is important as it limits the depths
to which pits should be designed for. Else all pits face risk of
seepage and have to be treated with waterproofing.
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In crusher for example, choice is between height of ramp and

depth of pit. An optimum solution is to be found by
comparing cost of ramp with depth of pit and its
waterproofing.
It is always understood that building and foundations are for
the machinery housed in them and not the other way round.
Civil expenditure is a 'one time' expenditure and erring on
the generous side is better than short-sighted economizing.
Design of Silos
In designing silos, among other factors to be considered are:
1. If material is to be fluidized like in blending silos and in
cement silos, then the walls of the silo would be subject to
'fluid' loads exerted by fluids like water and hence would be
designed from this angle.
2. If insides should be dry at all times as the seepage of
moisture, rainwater, through cracks, etc., would result in
setting of the material (cement) in hard mass and in
formation of lumps which would make it difficult to extract
it; it could also affect fluidisation adversely and hence
blending and extraction.
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Silos should also be designed to withstand pressures from

within. Safety hatches should be provided on top to release
build-up of pressures. For silos located at a distance from a
building it is necessary to install a structure to go to the top
where machinery like dust collectors would be installed.
Such structure should preferably be independent of silo
walls as otherwise danger of seepage increases.
Some silos rest on the ground; others are raised and house
machinery underneath them. These silos would have ring
beams and columns of sufficient cross section, which
support the load of the silo and also that of material in it.
Such silos are therefore expensive but they save cost of
another building structure like kiln feed building; sometimes
even a separate packing plant or more often, bulk loading
facility.
It is always desirable to install airlift vessels at ground level
(or in pits of not more than 1m depth). But airlift vessels are
5-6 m in height and feed points to them being at top,
increases the height of building from which they are fed.
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Contours
A contour map is very useful in ascertaining levels in
different parts of the plot and to ascertain natural drainages
in the plot. These could be used for draining the plant of
rainwater etc. There could be natural seasonal streams
flowing through the plot. They could be made use of to drain
rainwater so that the plant does not get flooded. In a flat
contour, it is possible that a plant will get flooded in rainy
season, if water has nowhere to go. Planning good drainage
in all sections of the plant is therefore very important. Pits
which house machinery and floors that go below ground
level should also be protected against flooding.
Contours could also be made use of in the planning of the
layout of the plant. A sloping contour can be made use of to
install kiln and cooler. Civil costs could be considerably
reduced if the natural slopes are made use of. In level
contours, kiln pier heights would increase from discharge
end to feed end. If ground was sloping, they could be of the
same height as shown reducing civil costs.
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As mentioned earlier, belts under crusher, part of deep

bucket conveyor and conveyors under clinker storage are
generally housed in pits; but pits cause problems of: 1.
Water seepage, 2. Dust nuisance, 3. Difficulty in
maintenance.
If the ground is rocky excavating pits to install these
conveyors can also be expensive. Now the trend is to install
drag chain under the cooler at ground level. This no doubt
increases height of preheater building by several meters, but
is a convenient arrangement to reduce maintenance costs of
cooler. Contours can be put to good use for laying out
trestles of conveyors.
All departments need not have the same floor level within
the plant. Small difference of 1.00 meter could be
permissible. This would save considerable earth work.
1.13 Roads
Roads provide vital access between: 1. The plant and the rest
of the world, 2. Various sections of the plant, 3. Quarries
from the plant, 4. Crushers from quarries.
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Roads in quarries, between quarry and crusher carry heavy

traffic- sometimes all round the clock. As working faces
develop, limestone is to be hauled up over greater depths
from pit level to reach the crushing plant.
These roads should be wide enough to allow the large
dumpers to pass each other and the slopes should be
minimum (practical) to save fuel consumption. This also
applies to the ramp along which dumpers ply to reach the
crusher. The ramp should have minimum two lanes and a
good level area at the top for dumpers to tum around.
Shoulders should be provided at convenient points for
stopping the vehicle on side so that the regular traffic is not
blocked.
Roads should be sized according to:
(a) Density of traffic.
(b) Sizes of vehicles plying on them.
In this exercise, sizes of vehicles like dumpers, cranes,
dozers, which may ply occasionally only, should also be
taken into account. In a cement plant part or whole of
cement produced could be sent out in truck loads. Volume of
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traffic of incoming trucks and outgoing trucks should be

calculated and roads planned accordingly.
It is also necessary to provide for parking space for trucks
that have to await loading. This external traffic should be
kept separate from the other internal traffic of the plant. If
possible, separate pathways could be provided for two
wheelers and also parking for them, so that they do not get
parked on road and obstruct traffic. In present times
planning of parking spaces has also assumed importance
because of increase in vehicles owned by the work force. All
roads within the plant do not carry same volume of traffic.
Hence widths of roads should be designed to suit density of
traffic and sizes of vehicles plying on them.
However, it would be a good idea to provide a 2-way ring
road in the plant to provide access to all sections for
maintenance. In doing so plans for expansion should also be
kept in mind. Concrete roads would be ideal. They reduce
dust nuisance and save fuel particularly on gradients.
Therefore roads leading to crusher from quarries in
particular should be concreted.
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Roads inside plant and also road from highway to the plant
may not be concreted to start with. They should be
concreted after the machinery is brought into the plant and
is erected. Otherwise, roads would get damaged. Concrete
roads have long life and require less maintenance. They also
reduce complaints from community about dust nuisance. At
project stage, it would be wise to provide for concrete roads.
Actual construction can be taken after erection is over.
Non-Factory Buildings
Non-Factory Buildings are facilities which indirectly help in
production and which are necessary for the smooth
operation of the plant on a continuous basis. They include
facilities like: 1. Workshops for machinery and electrical
repairs, 2. Stores for spares and consumables, bags,
explosives and refractories, 3. Laboratory, 4. engineering
offices within the plant, 5. Civil Engineering offices, 6. Water
treatment plant, 7. Pumping stations, etc., 8. Grid and Plant
substations, H.T. and L.T. control rooms and panels, room for
MCCs, 1. Watch and ward - security office, 2. Time office, 3.
Administrative office, 4. Garages, maintenance facilities for
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vehicles, 5. Petrol/Diesel pumps, 6. Parking facilities, 7.

Public Conveniences, 1. Guest house, 2. Colony and
recreational facilities, 3. Shops, Post Office, Bank & other
commercial facilities.
Requisites for Non-Factory Building
First requisite for all these is that they should be functional
and convenient. Mere opulence and lavish expenditure on
decor and materials used do not make a building suitable for
the purpose it was meant. Therefore each building is to be
planned in consultation with people, who are going to use it
and after ascertaining their present and future needs.
Locations of buildings should also be decided from the point
of convenience and accessibility. Load centres for different
categories of buildings should be found out (which sections
need/ use what most) and building located accordingly.
Locations of Non-Factory Buildings
Out of necessity some buildings can be located only at
specific points in the plant like:
1. Main security office and time office at the main entrance of
the plant.
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2. Water treatment plant and water pumping station near

the incoming point of water supply into the plant.
3. Central control station cum laboratory near main
production lines.
4. Bags godown near packing plant.
5. Electrical substation and Control Rooms near load centers.
6. Quarry office and Garages for maintenance of earth
moving machinery near quarries; explosives magazine at a
secluded spot near quarries.
7. Administrative office should be easily accessible to outside
parties and so located that outside parties do not have to
enter the plant. Hence it would normally get located just
outside the plant but with access to it from the rear for plant
personnel.
8. Parking lots for trucks and conveniences for drivers, also
just outside the plant.
9. Canteen and rest room for workers at a central point
within the plant or just outside the plant.
Drinking Water
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All buildings should have facility for drinking water. If water

coolers are installed, so much the better. Disposable cups
can be used. But these would have to be replenished
regularly.
Fans
Providing adequate cross ventilation in designing buildings
is a must. Even then fans and coolers would be found to be
necessary for 6 to 9 months of the year. Working places like
offices must of course have fans at close spacing but fans
must not disrupt working by blowing away papers.
Air-Conditioning
Important offices will be air-conditioned. Air conditioning
can be central for a multi storied building housing Central
Control Room, X-ray analyzer, important sections of
laboratory, engineering offices, etc. Offices of senior
executives would have room air conditioners. For rooms of
large sizes, Industrial size air conditioners can be used.
Room coolers are an inexpensive way of keeping
temperatures down but they increase humidity and also
need water supply, there can be spillage also. Providing
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comfortable working conditions by way of fans, coolers, air-

conditioning should be treated as a necessity and not a
luxury. For computer systems and control panels, they are a
must as they keep dust out besides maintaining comfortable
temperatures and humidity.
Toilets
Toilets should be located in every building conveniently
located and adequately sized for both gents and ladies. This
simple but common need for plant personnel whether for
officers, executives or workers has been long neglected. A
few blocks located at remote places was the practice a few
decades back. Toilets must have continuous and adequate
water supply.
Sizing and Layout of Buildings
Sizing and layout of buildings should be arrived at with the
help of architects to whom must be furnished: 1. Primary
and secondary functions and activities to be carried out, 2.
Number of personnel- using the facility always, 3. Transiting
personnel, 4. Need of lighting general and focused at work
places, 5. Need for ventilation and air conditioning, 6.
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Locations of lifts and stairs. Adequate room should be kept

for expansion also. Architects should be selected on basis of
their past experience and expertise in this type of work.
Design Aspects of some of the Non-Factory Building
Stores
These are generally 'central' for cement plants except
perhaps for quarries. Stores contain 'consumables' and also
'spares'. Stores should be planned from point of ease of
accessibility. It should be easily accessible for receiving
diverse materials, refractories, grinding media, castings,
lubricants and so on. If a railway line can be brought up to it,
it can be a great convenience. Facilities should be provided
to unload trucks and wagons and to shift unloaded material
either into yard or into the stores. An open store yard is a
must to store bulk materials like refractories, grinding
media, heavy castings like rollers, gears, lining plates, cables
etc., among other things.
These could be handled by fork lift trucks or movable cranes
as and when required. While castings could be stored in the
open there should be roof over items like cables and
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refractories. Finish machined emergency spares like riding

rings, rollers, gears etc., should be stored with protective
covering over them. Oils and Greases, Cotton waste, are
consumables, which are also fire hazards. Such materials,
which are required regularly, should be stored under cover
but 'separately' with adequate protection against fire and to
prevent fire spreading to other parts of the store.
A separate delivery or issue counter is arranged for daily
issues. Further, they should be so stored that dispensation is
easy and free from dust. Stores also need facilities to weigh
in coming and out-going goods. The scales installed should
be adequate for this purpose. It may have a portable scale
also. Considerable advance has been made in design of racks
and bins and in equipment for handling goods within the
store. Aisles and passages should be designed so that such
modem equipment could be used.
These aspects should be closely gone into and expert advice
taken in planning a store and its layout. Heavier items
should be stored on ground floor and lighter items on
mezzanine. There should also be a closed room with cabinets
97
for storing high cost items. With computers it is now easy to

maintain inventory of stocks and their values can be
obtained almost instantly. Computers can also provide
information on stocks, consumption, orders in transit etc., so
that ordering procedure can be stream lined in such a way
that stores do not run out of stock of any materials, stores /
spares at any time nor do they overstock.
Protection against fire is a specially important aspect of
stores layout and design.
Another important aspect is precautions against theft and
pilferage. Open store yard and stores should not be
accessible to all and sundry. Issue counters should be
cordoned off and personnel from other sections of the plant
who have come to draw goods from stores should wait there.
Workshops
The extent to which a cement plant should equip its
workshop to carry out repairs / machining of damaged
parts, would depend on the location of the plant and the
infrastructure facilities available in the neighborhood.
Remotely located plants would have to spend considerable
98
time in procuring parts from cities / suppliers located far

away and hence should have better equipped workshops.
Basic Facilities in Workshops
In any case some of the 'basic' facilities should always be
included in planning a workshop.
(i) Turning and machining facilities like lathes; Lathe may
also have a grinding attachment, (ii) Milling and planing
facility including a milling cum-boring machine and a
shaping machine, (iii) Drilling facility to drill holes; a radial
drill is a great help, (iv) Cutting facilities.
(v) Welding facilities for electric and gas welding for thin
sheets and also for plates up to 25 / 50 mm thick, (vi)
Forging facilities to forge small components, (vii) An open
yard for marking development of plates for facilitating
fabrication of chutes, ducts and hoppers, (viii) Plant may
also have a cupola for casting small items, (ix) Plate bending
machine for rolling shells and pipes, (x) Balancing machine
for small impellers and rotors, (xi) If the plant is doing its
own hard facing of hammers, rollers of vertical mills and
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roller presses, facility for welding in shops and in situ with

fixtures using requisite electrodes should be available.
Selection of Machines
Sizes and capacities of respective machines would depend
on size of the plant and individual largest components
required to be made, hard faced, machined and ground.
Outsourcing
It is common these days to get maintenance and repair jobs
done outside. Even maintenance of sections of plant is given
'on contract' like maintenance of: (i) compressors / blowers,
(ii) air conditioners, (iii) laying of refractories – castables,
(iv) computers.
Apart from routine maintenance, plant may also take up
from time to time additions / modifications in a section. The
'in house' workshop facilities can be handy on these
occasions.
Workshop Building
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Size of workshop building can be planned after deciding on

the various facilities to be provided and largest size /weight
of machines / components that may be required to be
handled in it. Individual machines would be selected taking
these into account. While gears / pinions often need to be
reconditioned, there is no point in installing a gear hobbing
machine for the purpose. They are best treated as spares and
stocked and replenished from time to time.
Handling of heavy and large sized individual pieces of
machinery, placing them on machine table / beds etc., should
be done with the help of overhead traveling crane, which
should cover entire area of the workshop. While main
building would contain machine tools of various types,
annexes would include welding and cutting and forging
facilities. An adjacent open yard with smooth concrete floor
would provide facility for marking templates. The plate
bending machine should also be installed by the side with
overhead facility for holding plates being bent. Heat
treatment facilities are required many a time to relieve
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stresses, to obtain desired hardness. Most common is the

tempering facility.
Also needed are facilities for heating pinion shaft assemblies
to take out and fit on pinions and rollers on to them. Oil / gas
fired furnaces with quenching tanks should be availablefor
this purpose.
Electrical Repair Shops
Electrical repair shop should have facilities for attending to
problems related to: 1. Starters - DOL, SID, SRR, 2. Motors -
H.T & L.T S.C., S.R. D.C, 3. Switch fuse units - Circuit breaker -
oil- air, 4. Relays, 5. Busbars, 6. Cables - cable joints, 7.
Meters - ammeter, voltmeter, energy meter, 8. Lighting, 9.
Transformers - Power, Current & Voltage, 10. Earthing /
Lightning.
Planning of electrical shop should be done in the light of: (i)
Facilities available in the neighborhood for servicing and
repairs, (ii) Possibilities of getting jobs done through
suppliers / their service stations, (iii) Spares that can be
maintained to tide over difficulty including spare starters,
circuit breakers and motors. Even then the shop should be
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equipped to carry out some basic jobs: (i) Megger tests to

check insulation, (ii) Drying of windings when megger tests
show need to do it, (iii) Cable jointing, (iv) Periodical
inspection and checks of relays, safety tripping devices, and
calibration of meters, (v) filtering and changing of
transformer oil, (vi) Winding of motors.
The electrical shop should have winding facility for repairing
windings of motors, for repairing insulation, for cleaning
commutators and so on. Often bearings of motors need to be
replaced. These would almost always be antifriction
bearings. A list of bearings in use should be made with the
help of suppliers and spare bearings should be maintained in
stock. The workshop should have hydraulic gear to remove
old bearings and to fit new ones.
Motors
The motors list could be regrouped according to type, kW
rating, speed, voltage, etc. Conveying equipment, blowers,
compressors feeders, air locks, remotely operated dampers
etc., may have motors of similar specifications. Thus if 10
numbers 7.5 kw, 1440 rpm, 440 V Squirrel Cage motors are
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in use in the plant, then it would be prudent to order one

spare motor of this rating. At the other end when Raw mills
and Cement mills are both ball mills, they could be having
similar ratings. A plant may thus have 2 to 4 motors of
similar ratings like of say 2000 KW, 6.6 kV, 750 rpm, slip
ring induction type. One spare motor even for only 4 motors
would be justified as loss of production would be much more
costly. This logic should be followed to list out spare starters,
switchgear, cables, relays, motors, etc., and they should be
ordered and so identified.
Whenever occasion arises, the faulty unit is removed and
spare available put in its place. The faulty unit is then
repaired either in company's workshop or sent for repairs to
a properly equipped service shop. When it comes back is put
in the 'spare' lot to serve as spare again. The 'spare lot'
should always remain at the level planned.
Testing Laboratories
Tests of different kinds are to be conducted on various
materials and results recorded at various stages of cement
production. Some tests are statutory. Tests start with basic
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raw material - Limestone. Primary tests, which need to be

regularly carried out, are chemical analysis, in particular
oxides - CaO, MgO, Si02, Al203 ' Fe203 and other
constituents like alkalies and chlorides and with various
statutory tests on cements produced.
Earlier all these tests- destructive, non-destructive were
carried out in the Laboratory.
Now with use of automatic sampling and 'X-Ray analyzer,
most of the analytical tests are carried out in air conditioned
rooms adjacent to Central Control Room. For convenience
sake the Laboratory is now located in the same building to
carry out other tests like testing strengths of cement, testing
grindability, calorific value etc.
Laboratory is to be designed to include machinery for all
these tests and laid out to carry them out in an efficient
manner. The laboratory should also be equipped to carry out
physical tests to establish crushing strengths, grindability
etc. These tests are useful to provide a pointer as regards
power consumption and production from mills. It is also
useful to carry out tests to determine calorific value,
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moisture and ash in coal as received and as fired on a regular

basis.
For cement, fineness tests to establish 'blaine surface' and
sieve analysis down to smallest micron sizes for various
fractions in grinding circuit are important and are regularly
made; as also strengths of cements made at regular intervals.
Same 'X-Ray analyzer' would carry out analytical tests on
clinker and cement. The whole purpose of tests apart from
statutory tests, is to ensure that quality product is
consistently produced with minimum in puts. Hence the
laboratory must feed-back instructions for appropriate
corrections, regularly / continuously and they must work
closely with production departments. It should be equipped
and laid out to carry out these Quality Control Functions. Its
planning is now integrated with planning of Central Control
Rooms.
Offices
Offices of junior and senior executives and Management
personnel should also be planned in such a way that offices
of persons interacting most with one another are located
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nearby so that time is not wasted in going from one place to

the other. A conference or meeting room on each floor for
holding internal meetings or meeting visitors is very useful.
The conference room would have facilities like black boards
and overhead slide projectors and microphone. There are at
least two distinct schools of thought in planning of offices.
1. One believes in 'open' layouts which do not have cabins
but provide enough privacy for the officers when they want
to concentrate on their work.
2. The other believes in closed offices like cabins and closed
halls for their executives and staff. It needs a great deal of
thought to plan offices.
(i) They should be planned for present and future needs.
(ii) Should take into account currently available facilities for
communication, data processing, personal computers, etc.
The company may even have a server station and several
outlets working in parallel. The office layout should facilitate
installation of PCs, with cabling properly laid out. Lighting in
the office should be adequate for the purpose; indirect soft
lighting for general area and table lamps on tables would be
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ideal. Even when offices may be centrally air conditioned or

with room AC units, fans would still be required. The 'offices'
can become status symbol and a prestige issue on account of:
(a) Area, (b) Carpeting, (c) Decor & quality of furniture.
The differences should be kept to a minimum so that there
are no heart bums affecting morale.
Head Office
Most Cement Companies would have their Head Office in a
city or in a metropolis distant from the plant. Plant and Head
Office can be linked by latest means of communications now
available, including 'teleconferences' so that it is not
necessary for Head Office staff to visit works to clarify a few
points and for works executives to visit H.O. to obtain
sanctions, etc.
Head Office may also be the center for 'Finance and
Accounts' functions for complying with statutory
requirements like audit, board meetings, etc. It would also
be the hub from which the Sales and Marketing functions
would be directed. The Head Office must therefore have:
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1. Central communications and data centers computerized

and linked with plant and other offices.
2. Board room for Board Meetings.
3. Finance, Accounts and Statistics and Audit Sections for
monitoring Company's financial health; interest to be paid
on loans; collection of dues and so on.
4. Sales and Marketing sections which would direct and
execute policies of the Company in promoting sales.
The Head Office staff would thus have very senior executives
like:
(a) M.D. and CEO - a full time executive, (b) Marketing
Director, (c ) Finance Director, (d) Director M.I.S.
Location of Head Office in a city is important. It should be
convenient for visitors; should be easily reached and should
have sufficient parking place around it. Size of head office
would depend on the scale of operations of a Company and
hence the staff to be accommodated in the H.O. In big cities
parking space is becoming critical and if Head Office can be
planned and constructed due attention should be given to
provide for this facility. Head Office should also have
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central/room air conditions or a combination of two. (The

building itself may be air conditioned if taken on rent). UPS
facilities for power supply to be maintained in times of
scheduled and unscheduled power cuts particularly for
computer systems, lifts, lights and fans are necessary. A
diesel generator set may also be installed if office is
sufficiently large.
Parking
Parking facilities are now required on a much larger scale in
the plant because of steep increase in number of two and
four wheel, powered vehicles like scooters, mopeds and cars.
Thus adequate space should be planned in the layout at
several locations for this purpose. It is best to have a parking
space around each building and office.
Garages
Garages will house company's vehicles when not in use and
will also have facilities for normal servicing and
maintenance. These should naturally be installed to suit both
large vehicles like trucks and for cars. Garages for earth
moving equipment like dumpers, shovels, dozers, cranes,
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etc., would need different kind of facilities and space

required would be larger. If vehicles are to be lifted then
platform with higher capacity hydraulic lift would be
required.
There should be two lifting platforms one for normal
servicing and the other for repairs as vehicles under repairs
will block the lifting facility for a longer time. Company will
also have to plan and provide for 'Service Stations' to
dispense petrol and diesel for its vehicles and also for
vehicles of staff. Quarries will most certainly have its own
service station for its earth moving machinery.
Facilities for Workers

Facilities connected with labour force such as: 1. Canteens
and Rest room, 2. Time office, 3. Washing and cleaning
facilities, 4. Drinking water- water coolers, 5. Public
conveniences, 6. Parking.
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Should be planned with great care so that these do not

become cause of discontent. They should be designed and
planned for, looking at them from workers' angle or point of
view.
Colony, Guest Houses and Clubs
Colony
Company would be making organizational charts listing
Executives, Officers and Staff (skilled and semi-skilled) that
would be working in the plant. It would also list out sections
working in: 1. General shift, 2. Two Shifts, and 3. Three Shifts
and identify the staff in various sections according to their
status and skills.
Company should also list unskilled workers and casual
labour that would be needed from time to time. The
company has then to decide for whom they would have to
arrange for quarters from the point of operational
convenience including maintenance and repairs.
In taking these decisions company will take into account
locations of nearby township / village etc., and availability of
residential accommodation there. Recruiting 'local' people of
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requisite skills is an advantage in that they have 'roots' there

and they are unlikely to leave their jobs. This is particularly
true of 'unskilled' and casual labour.
The Company would need in this age of computerization and
Information Technology, more skilled and semi-skilled
workers and 'knowledge Workers.'
Allocation of Housing
Staff working in sections that work round the clock like
mills, kilns, packing plant, control rooms, (sometime even
quarries and crusher); staff of maintenance and repair
section; staff of utilities like power and water supply
sections would most probably be housed by the Company
regardless of their qualifications or status in hierarchy.
Designs of Accommodation to be provided
Having thus arrived at a total number of housing facilities,
the next point to be settled is size and type of houses. In old
times, land was cheap and hence individual houses (though
small) were common even at lowest level with even a small
compound for workers to do their gardening etc. With land
costs being what they are it is now customary to build multi-
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storeyed apartments, which can be categorized according to

sizes of flats.
According to the hierarchical status of the worker /member
of staff broad policy decisions would have to be taken to
classify workers and the type of quarters they would be
entitled to. It is best to keep down the varieties of types of
houses / flats. In a colony, a 'house' is a 'status' symbol and
announces salary and status of the person. Therefore there
is a lot of heartburn in this matter, which cannot be avoided
altogether.
Planning the Housing Colony
After this preliminary work, planning the layout of the
colony can be taken in hand.
First its location:
In old times colony was next to the plant. Care was generally
taken to locate it outside the 'wind rose' so that, exhausted
dust will not be settling in it. Other factors affecting location
would be proximity to highway, village I town, etc. So the
one nearer to highway, village etc., would be selected
assuming that, land was available. Apart from 'wind rose'
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considerations mentioned earlier, it should not be so located

that workers and officers have to cross highways I railway
lines. It should not be too near nor too far from the plant and
the town if close by and the highway. Now, almost all
workers have either cycles or two wheelers (a great may
officers have cars also). Therefore, colonies can be located at
a distance from the plant. This reduces noise level and also
dust nuisance.
It is possible to create green belts around the plant and
colony. If the plant is at a distance of > 2-5 Kms from the
town / village, the Company would have to provide
amenities like, supply of milk; provisions; vegetables;
primary school and dispensary for out-patients and also a
Post Office and a Bank.
Facilities in the Colony
Colony will also have recreational facilities for workers like:
(i) Satellite, transmission station, dished antenna for TV, (ii)
Club with facilities for sports like, badminton, table tennis,
cards, etc., (iii) Gardens with play comers for children and
for old people, (iv) Playground for sports like football,
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cricket, etc., Facilities to be provided for all residents would

include: (a) Water supply - 24 hours or regulated, (b)
Electricity - 24 hours, (c) Conservation and sanitation, (d)
Depending on climate and location, fans, etc.
It is for each Company to decide whether to charge for water
(mostly free) and electricity – sometimes free. Load of
lighting and electrical gadgets commonly used in houses
should also be taken into account. A civil engineer supported
by staff like plumbers, electricians, masons, etc., should be
available for maintenance. Sometimes managements also
construct a church/temple / mosque on premises.
Layout of the Colony
The layout of a colony has to follow principles of 'town
planning' in almost all respects. The layout should provide
roads designed according to traffic, metallic or concrete.
Trees, and gardens and parks should also be an integral part
of the design of a colony. A Colony adds to capital costs of the
project. It is possible to obtain loans for housing from
Government agencies in some States.
Cost of Colony
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Cost of colony can be estimated with the help of architects by

submitting to them the preliminary design of Bungalows,
houses, duplex houses, apartments, etc. It may be a good
idea to appoint Architects to design the colony who have
specialized in such work.
Green Belts
A green belt is now statutory between highway and the
plant. It serves as noise as well as dust absorber. Though a
good many workers could be having two wheelers now; it is
best to arrange the colony in such a way that workers'
houses are close to the plant and officers' after that.
Companies now spend large amount on gardening in the
plant and in colony and in landscaping in plant and in
quarry. They encourage staff to have their own private
gardens, A nursery as well as a horticulturist is now a part
and parcel of a cement plant.
The excavations and over burdens from quarries provide
almost free fertile soil for gardening and landscaping.
Landscaping can be extended to quarries also. Excavated and
abandoned pits can be turned into lakes for recreation and
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sports. However, they should be well protected from

operations going on in adjacent working sectors of the
quarry. Wastewater treatment plant can save substantial
quantities of water particularly for non-drinking uses like
gardening.
Medical Centre, Shopping etc.
The medical center and shopping facilities and community
center should be more or less centrally located within the
colony. When workers are medically covered, Companies do
not have to provide hospitalization facilities. They can have
arrangement with medical provider or with private hospitals
for 'beds' reserved for their staff and workers. The purpose
of listing these things out is to provide for them in capital
costs and in plant layouts and layouts of colonies.
Guest Houses
Cement plants being located in remote places are often
required to provide boarding and lodging facilities for
visitors on long and short term basis. Most cement plants
would therefore have guest house/s for visitors, located
either near the plant or in the colony.
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Visitors can be diverse in status, according to their

businesses with the Company, for example; (a) Vendors'
representatives at junior and senior levels, (b) Erection and
Commissioning, Supervisory personnel, (c) Government
officials at various levels, (d) Dealers.
Company's own junior bachelor staff like trainees would also
need guest house or dormitory like facilities.
Types of Guest Houses
Guest houses thus fall into various categories: (i)
Dormitories, (ii) Junior guest house.
(iii) Middle / senior level executives, (iv)Very senior
executives and Directors.
Only large plants would afford to have separate guest houses
for each of these categories. It means duplication of services
and personnel. To save on capital costs and yet maintain
standards and quality, it would be best to have:
(a) Dormitories - single room, single bed type and self-
contained - guest house for junior officers and visitors of
similar level.
(b) Senior guest house for higher ups.
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For VIPs and VVIPs, there is generally a Directors' Bungalow

that can be used. Its occupancy is minimal.
Suggestions about a Guest House
Some suggestions on design of a guest house:
(i) It should have room air conditioners of size
corresponding to size of room, (ii) Attached toilet and bath
(No tub except for VVIPs) with geysers, (iii) Single beds in
single rooms and twin beds in double rooms, (iv) Room
should have a small desk, chair and table lamp for working,
(v) A common lounge and dining room, (vi) Parking space
around, (vii) The guest house should have small dormitory
like rooms with toilets for drivers of visitors' cars.
Distance of guest house from plant should be short, say a
walking distance except for VVIP guest house. This way
company does not have to provide transport for visitors to
take them to the plant. Company's policies would decide
whether only vegetarian meals would be served and
whether liquor could be consumed in guest houses.
Facilities in the kitchen should be up to date including, gas
burners, ovens, refrigerators large and small- with deep
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freeze facilities, ventilators for kitchen to take away fumes,

water coolers and so on. Some companies have introduced
self-service in canteens. It is a good idea when large number
of people are to be served in a short time. It should also have
recreation facilities like card room, table tennis and TV and
Newspapers and Magazines.
Clubs
Most Cement Companies have Clubs for recreation and
sports. Company policy would decide whether there should
be a common club for both workers and officers. The size of
club buildings and facilities in them should be provided
accordingly. Cable TV is a must for entertainment and
relaxation of workers and staff. It links works in a remote
place with outside world and workers do not feel isolated. In
separate clubs, facilities get duplicated without getting used
fully. In sports activities, borderline between workers and
officers becomes thin. Hence, sports activities could be
common. A large ground, on which outdoor sports like
Hockey, Football and Cricket and also athletic sports like
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races can be played, adjacent to the main building of the club

would be a good idea.
Indoor games like badminton, billiards, table tennis would
also be provided for. Some clubs also have reading rooms
and lending libraries. Clubs do have a value of their own.
With active support and participation of Management they
are a good meeting ground between workers and officers
and can bring about harmony in relations.
If the officers, which are few in number must have their own
club, it should be sort of annexure to the senior guest house
so that even visitors can use the club's facilities. Some
companies depending on preferences of promoters also
have: 1. Swimming pools, 2. Auditorium for cinema and stage
shows with microphone and loudspeakers, 3. Restaurant /
bar. The facilities can be added later when a plant starts
making profits. The use of club facilities should be
subsidized but not free.
Water Supply
Utilities - Water
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Amongst the 'utilities' most important could be water. It is

used in the plant as well as for drinking and household uses
by workers and in departments and in colony. Water may
come from bore wells or from perennial rivers or streams or
lakes or canals. Overheads tanks are necessary in the plant
premises and in colony, crusher and quarries to provide
uninterrupted supply of water. While process water like that
used in conditioning tower in ESP is lost, cooling water can
be re-circulated. It therefore needs cooling ponds or cooling
towers.
Design of Water Supply System
Water supply system needs to be carefully planned as water
is a scarce resource and is becoming scarcer. It may not be
possible to plan a water system in minute detail at the
project stage but requirements and how they can be met and
capital costs thereof should be known in sufficient depth so
that errors of omission and commission would be minimum.
It would be better to err on safer side as it would be
expensive to upgrade the system or enhance its capacity
later. For example, if the requirement of water is 5,000litres
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per day for the main plant and say 8,000litres per day after
expansion, it would be prudent to install wells in the river
bed that would supply 8,000litres per day and also arrange
for pumps and pipe lines that would pump at that rate in the
first phase only. Initially, pumps would work for smaller
number of hours and after expansion for longer number of
hours. Overhead tank to be provided should also have
capacity required after expansion. Separate overhead tanks
for crusher and quarries and colony would be desirable even
if quarries were close to the plant.
Water for Green Belts, Gardens
Presently, there is considerable emphasis on 'green belts'
and gardens and parks inside plant and outside and in
colony. These require a good amount of water. Chemically
treated sewage water could be used even for drinking
purposes but that may not be possible due to sentimental
objections to such schemes. However it can certainly be used
for non-drinking purposes like gardening mentioned above.
It would be necessary to install a water purifying plant and
separate distribution system to implement the scheme.
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Treatment of Water
Water needs to be softened for long life of nozzles of
conditioning tower and tubes of after coolers of
compressors, oil coolers and other water-cooled machinery.
Hence, a water treatment plant would be an integral part of
the water distribution system.
Water from Bore wells
When source of water has to be 'bore wells' it would be
necessary to establish ground water level in different parts
of the year and in different parts of the plant and colony.
Scientific assessment of availability of ground water should
be done for locating bore holes. There should always be
more than one bore well that too located in different parts of
the plot available for plant and colony, so that all do not dry
up at the same time and continuity of water supply is
maintained.
Study of Resources for Water
125
Study of rainfall, maximum and minimum levels of water in

river bed: underground water tables – minimum and
maximum - for at least 15 years should be carried out. It
would help to arrive at decision of how best to procure
water.
Water for Captive Power Plants
Among the major consumers of water would be diesel
generating sets or thermal power stations for captive power
stations. Their requirements should be assessed and
included in planning procurement and distribution of water.
Monsoons are unpredictable and hence to depend only on
water from river, or stream would not be wise even if these
sources were available. It would be better to have a standby
source in bore wells also.
Rain Water Harvesting
Water is a scarce resource. It gets replenished in every
monsoon. 'Water harvesting' is a must for all future plants so
as to ensure that water tables do not dip too low in dry
months. Quarry pits could be used to store water. Quarries
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could even be a source of water when water tables are high

and working faces go deeper and deeper.
Electricals and Instrumentation
Electrical Systems – General
Power Supply and Distribution in Cement Plants
All machines are driven by electric motors. Majority of the
motors are 400- 440 volts. A selected few motors of higher
ratings are HT motors with 3300, or 6600 or 11000 volts.
Most motors are fixed speed and unidirectional motors.
Motors for kilns and coolers and feeders and some fans are
variable speed motors.
Variable speed motors can be either AC or DC with ratings
ranging from fractional kWs, for motors for dampers, valves
etc., to several hundred kW for motors for fans. All these
motors are to be supplied with electric power at voltage and
frequency and type of circuit for which they are designed.
Voltage and Frequency
In most developing countries, frequency of power supply is
50 cycles. Voltage of transmission could be as high as 222 KV
or 132 KV for large capacities and 66 KV, 33 KV or 11 KV
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down the line depending on MVA capacity of the substation.

The voltage of generation itself would be say 6.6 KV. It is
stepped up for transmission; longer the distance over which
power is to be transmitted higher the voltage of
transmission to minimize losses in transit.
Generation of Power
Electrical power is generated in States or by State Electricity
Boards. It can be thermal power using coal as fuel; steam is
generated in boilers and drives turbines which in turn drive
alternators or generators. Power is also generated in 'hydel'
stations by using water power. A balanced proportioning of
generation between thermal and hydel power ensures
availability of power in all circumstances in all seasons of the
year.
Hydropower is obtained from water, which in turn depends
on seasonal rain fall. When rainfall is scanty, quantity of
water collected is affected and power generation is reduced.
Hydro power generation is thus close to the source or
storage of water.
Thermal Power Stations
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Thermal power stations based on generating steam in

boilers by burning coal depend on regular supply of coal.
This coal can come from near or from far. Its supply may be
affected by strikes in collieries or by bottlenecks in transport
system, and sometimes also by fluctuations in quality of coal
supplied. Monopoly of State Electricity Boards to generate
power has been diluted of late by Central and State
Governments permitting private parties to set up large and
small power plants.
Captive Power Plants
A large number of captive power plants installed by cement
industry have been DG sets; many large cement plants have
however opted for coal based thermal power plants.
Distribution System in the Plant
In a cement plant also there is a 'mini grid' receiving power
from main electricity grid and also from plant's captive
power plant. They have to work simultaneously and hence
should be 'synchronized' when working in parallel, i.e., the
voltage, frequency and phase must match. Alternatively,
captive power is used only to supply power to specific
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sections like kiln and one of the two major mills. However,
the present trend is to size captive power station large
enough and to synchronize captive power with grid power.
There was a time when Cement Plants found it cheaper to
use their own Power as compared to grid power. In recent
times however prices of both Light and Heavy Oils have shot
up and hence this situation does not exist any longer.
Ring Mains in the Plant
The plant has what is known as a 'ring main' which supplies
grid power to load centres within the plant. If the captive
power plant is large enough there can be two ring mains in
parallel.
H. T. and LT Drives in a Section
Thus some sections will have only LT supply and others both
HT and LT supply and also D.C. drives. One option is to step
down voltage from grid voltage for the total plant in one
place and lead HT lines from it to respective sections in
which HT motors are used. This arrangement required long
6.6 KV cables to various sections. Another option is to locate
transformers near load centres i.e., near mills and kiln.
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Both arrangements have their own positive and negative

points. Main objective should be to achieve continuity of
supply of power of right quality (fluctuations in voltage and
frequency and phase should be within permissible limits)
and flexibility (supply can be either from grid or captive
power) without interruption.
Synchronization of Grid and Captive Power
Even when parallel bus bar system or ring system is not
used, the grid supply and captive supply must synchronize
and work in parallel or individually without disrupting
power supply to any section of the plant.
Power Factor
Another important aspect is that of power factor.
1. Induction motors work at varying lagging power factors
depending on load.
2. D.C. motors have unity p.f. on D.C. side.
3. In case of synchronous induction motors, power factors
can be altered between leading and lagging.
Power factor as close to unity between 0.95 to 0.90 lagging is
desirable to get maximum from power purchased from the
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grid station. Lower the power factor, less is the useful energy
available and greater the losses. Power bills are based on
KWHs consumed and charges for maximum demand are on
KVAs.
Current Carried and Power Factor
Current required to be carried by cables varies according to
power factor.
Say total load of above motors is 200 kW; total current at
unity power factor would be 278 amps. If power factor were
0.85, the current would be 328 amps. All cables would draw
correspondingly higher current right up to the substation. It
is therefore, important to correct power factor at levels of
individual drives and also main power distribution panels.
Designing Power Distribution System
One of the first things to be done in designing the
distribution system is to work out the power to be drawn
from the grid for the plant. This can be drawn on a broad
basis starting from overall power consumption of similar
cement plants. For example if similar plants are consuming
95-100KWH/ton of cement, it may be assumed that the new
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plant will also consume the same amount and total power to
be drawn calculated.
Load Factor
For conversion power factor and load factors are to be taken
into account. Power factor has been dealt with above.
Though it would be maintained at 0.95, for working out
power to be procured, it may be taken as 0.9. Load factor is a
usage factor; all machines do not run for all the 24 hours and
at a constant load. Peak loads occur at different times in
different sections. To obtain required capacity in spite of
fluctuations, higher capacity is needed to be installed. For
cement plants where most sections work in three shifts, it is
customary to take load factor as 80 %.
Margins for Substation Capacity and Expansion
The substation capacity should allow for some margin for
additions etc., that are not foreseen today. Therefore for the
first phase, electrical demand would be fixed at with say a
25% margin.
= 21000 x 1.25 = 26500 KVA say 26.5 MVA
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If duplication is imminent, substation should be designed for

double capacity, i.e., incoming line should have capacity to
deliver 53 MVA. In substation, transformers can be added
phase wise.
Selecting Transformers
In selecting transformers, it is a good idea to select two
transformers in parallel rather than one. Transformers are
generally loaded up to 70 to 80 % of their rating. In above
case total load = 26.5 MV A. Total rating of transformer
would be 26.5/0.7 = 38 MV A. It would be preferable to select
two Transformers of 19 MVA each or even 20 MVA each.
If a ring system is used, there will be more than two
transformers located near load centers. Each of these
transformers should also be loaded to 70% capacity in actual
operation.
Standards of Design and Manufacture of Electrical
Equipment
All electrical equipment required in distribution of power
starting with transformers, LT and HT switch boards, Motor
control centers, cables etc., are governed by specifications
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and standards laid down by the regulator and by similar

standards in other countries. In selecting various electrical
equipment, pertinent standards should be referred to and
followed. Standards however specify 'minimum'
requirements and hence it is prudent to err on safer side in
design. All vendors must be asked to furnish detailed
specifications of their equipment and standards to which
they conform.
Maximum Demand
Many a time sudden over loads or simultaneous working of
all sections can push up the maximum demand and power
drawn will exceed contracted maximum demand. In such a
case, fine is to be paid. In times of power cuts, contracted
demand would not be utilized. In general the plant would
opt out to be penalized for not using the contracted demand
rather than reduce it. In times of scarcity of power,
electricity boards come down heavily on unutilized
maximum demand and may reduce the contracted demand.
The impact of tariff on account of maximum demand
however is generally about 10% of direct costs of energy.
135
Cost of Captive Power

The cost of captive power would be different from that of
grid power. Separate records need to be kept for the units
generated and consumed in the year from captive power
plant. The cost of generation can be worked out from:
1. Consumption of fuel (efficiency of D.G. set can also be
expressed in terms of KWH/litre of fuel oil consumed, which
can be converted into USD/KWH, 2. spares and maintenance,
3. consumables, 4. manpower, 5. depreciation, etc.
All added together would give overall cost of captive power
DG. Sets or Thermal Power Plants
In some regions the problem is so severe that for new
projects, or for expansion, Financial Institutions themselves
insist that new cement plant projects should incorporate
captive power generation to the extent of 40% of plants'
requirements and the viability of the project should be
examined on this basis.
While in any given year, generation of power for coal based
power plant could be maintained at its rated capacity,
generation of power from Hydropower plants is very much
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subject to good or bad monsoon and levels of water in lakes

which supply water to Hydropower projects. It is therefore
good to have a balanced mix between thermal and hydel
power in any State.
Capacity of Captive Power Plant
Capacity of the captive power plant to be installed would be
different for plants of same capacity located in different
parts of the country. For a period of about 3 months, actually
available power could only be about 70 %. From such
analysis, it can be seen that the D.G. set to be installed should
have a capacity of at least 30% of requirement of power.
Rating of D.G. Sets
However to arrive at the rating of D.G. set to be installed,
other aspects also need to be looked into. Clinker is a half
finished product that can be converted into cement at
convenience if properly stored. It would be the objective of
all operators to produce clinker continuously in spite of
power cuts. Therefore, in arriving at capacity of D.G. set it is
customary to include requirements of power for sections
137
from raw mill to clinker storage and. work out the capacity
of D.G. set on basis of load required to run these sections.
Thermal Power Plant
When captive power plant is a coal based thermal station, its
capacity will be arrived at in a similar manner. In a thermal
power plant, turbines will convert power from steam into
electricity by running generators. A very different layout
involving coal handling and coal preparation plant and water
supply system and boilers to generate steam at desired
temp. and pressure and also condensers and recovery
system for collecting water after steam has passed through
turbine and also cooling towers and other auxiliaries would
be required. This is a specialized job and should be entrusted
to Experts. Thermal plant should also be integrated in the
main plant augmenting needs of land, quantities of coal and
water, railway siding etc., for the purpose.
Power Distribution and Cables
Power Distribution System in the Cement Plant
Power Distribution System (PDS) of a Cement Plant begins
with the Substation of the grid where power is received and
138
ends with individual drives and points of usage. It is a large

network consisting of elements like Transformers, H.T. and
L.T. Control Panels, individual
Distribution Boards and Motor Control Centres; necessary
switch gear for safety and regulation and metering of power
used at various points.
Motors and their control gear; cables connecting various
units from beginning to individual points of usage; lighting;
earthing are other components of the system.
Design of the P.D.S. is a specialised job and should therefore
be entrusted to the Specialists. Almost all components of the
PDS are governed by Standards laid down by the regulator
or bureau of standards of other countries. The prevailing
Electricity Rules also lay down guide lines for selecting and
installing the equipment. All such Standards should be
meticulously followed for ensuring safety of machinery and
men.
Main Components of the PDS
Starting from grid substation sequence of various
components would be:
139
1. Main transformers reducing voltage of transmission to

voltage of h.t. motors in the plant.
2. Transformers to reduce voltage further to 415 /440 volts
which would be the voltage of majority of motors.
3. H.T. Control panel to which main transformers would be
connected and from which would go to h. t. motors in
various sections and to various sections of the plant.
4. L.T. Control panels which would be as many as the major
sections in the plant. They will receive H.T. voltage in the
plant; transformers reducing voltage to 415V will also be
connected to them. From these panels will go feeders to
motor control centres in various sections; there can be more
than one motor control center (MCC) in a section.
5. MCCs are distributed conveniently at various points in a
department to make operation and maintenance easy and
also from point of view of simplifying cable layout and
reducing cable costs and for calculation of energy
consumption.
140
6. Motor control centers will also include starters and

voltmeters and ammeters and energy meters and relevant
safety equipment like circuit breakers, relays etc.
7. Presently almost always motors and groups of motors
would be started from central control room through
Programmable Logic Controllers (PLC s).
8. System of cables H.T. and L.T. as required to connect
various components with one another to ensure continuity
of supply of Power.
9. Motors themselves to suit each application.
As mentioned earlier, each one of these components is
governed by the standards laid down by the Bureau of
Standards.
Motors List
The starting point for designing the power distribution
system would be the detailed Lists of Motors in each section
along with details like type, numbers, rating, voltage and
speed and type of starter. Their locations would be shown on
pertinent departmental drawings.
Locations and Numbers of MCCs
141
Next step would be to decide on locations and numbers of

MCCs to which these drives would be connected. In doing so,
it should be kept in mind that the computation of sectional
power consumption is facilitated. In this way, number of
drives, their ratings and spare panels to be kept in each MCC
and capacities of incoming and outgoing Feeders are worked
out.
Panels in HT and LT Boards
Working in this fashion, capacity and numbers of panels in
sectional L.T. Boards can be worked out. And proceeding in
the same manner, numbers of H.T. Boards and capacities and
numbers of panels in each can be arrived at.
Cables
Cables convey power to the point of use. There are HT and
LT Cables according to the voltage of power supplied. Cables
will be insulated and protected according to voltage. Most
drives would be three phase motors. Majority of cables will
also therefore be suitable for three phase. Therefore when
voltage is high, I is small, losses are small. It is therefore
economical to transmit power at high voltage up to the point
142
of use. However, HT cables need high degree of insulation

and hence are costly. Size and type of cables, depends on the
amount of current they carry and the voltage.
Motor Foundations
Motor and Gearbox foundations also in a way form part of
the planning of power distribution large motors will have
their own foundations. For small and medium size motors, a
common base frame for motor and gearbox would be used
and grouted in a foundation. Designing base frame for motor
and gearbox would need drawings for both with details of
bolt holes and their spacing, height of center etc. The cables
box on the motor must come to the right side.
Motors
An important aspect is direction of rotation. With a few
exceptions all motors would be running in one direction all
the time. If 'unidirectional' motors are specified, there is a
small but significant gain in operational efficiency of motors.
For large drives, jackshafts are used. They also need base
frames with tensioning device. The V belt drive should be so
arranged that the tight side is at the bottom.
143
The angles of contact for both pulleys and hence centre

distance between motor and machine is also important. V
belts and V belt pulleys are selected with the help of the
suppliers for the given drive rating of the motor.
There would be occasions like sudden power tripping when
machines like conveyors and even kiln, cooler, etc., would
have to be started on load. For such locations motor ratings
should be chosen allowing for this fact in consultation with
Suppliers. For kiln for instance motor rating would normally
be 1.6 times the full load power requirement. Apart from
this, for such applications high torque motors are selected.
In case of motors for kilns, mills and fans it is also necessary
to know Moment of Inertia of driven machine and time
available to bring it up to full speed from rest.
Motors are selected on the basis of enclosures, cooling, and
permissible rise of temperature of the winding above
ambient. Specifying ambient temperature and also this
permissible rise indicates class of insulation of the windings
of the motors.
Inertia of Load
144
Motors should be able to overcome, inertia of the driven

machine and bring it up to speed. Therefore, for large motors
and large fan drives it is necessary to know the moment of
inertia of the driven machine converted to motor speed. If
this is not taken into account, it would take inordinately long
to start a machine and to bring it to speed.
Lightning arresters
Preheater tower, silos and chimneys are tall structures and
need to be adequately protected against lightning. Structures
standing by themselves distant from taller structures should
also be provided with lightning arresters as precautionary
measure.
Instrumentation and Process Control
Process Control
No other section of a cement plant has made so much
progress as this. With Process Computers (PCs) acquiring
the capabilities of old time mainframe computers, it has
become not only feasible to install more comprehensive
instrumentation and process control but it has become
145
cheap also and has come within the reach of even small
plants.
In the operation of any process plant, which produces
products useful for the community, materials are bought in
and worked upon physically, chemically and in other ways to
bring about the product, useful to the individuals, to society
and to Industry. The process of production can generally be
divided into sections and sub-sections with materials
handling and storages in between.
For smooth, continuous operation, the processes in each
section must be carried out efficiently and according to the
standards laid down for them. Finished product of one
section is the raw material of another section. Therefore,
each section must receive raw materials of given
specifications and process it to another set of given
specifications and pass it on the next section.
The transition from raw materials to finished product is not
always a strictly linear sequence of operation. There are
inputs from auxiliary or supporting processes, which are
146
used to make finished products in that section -like

preparation of fuel for instance.
All this processing and sub-processing require continuous
monitoring to maintain quality and parameters of efficient
operation.
To do that it is necessary to measure them and record them
continuously. It is also necessary to be able to make changes
in case of deviations as and when required so that the
deviations are within the range that can be tolerated. Thus, it
is first necessary to list the parameters that need to be
measured and recorded and those that also need to be
monitored and regulated.
Parameters for Measurement and Control
Parameters may be categorized as:
1. Primary parameters like: (i) Rates of feed and fuel &
product, (ii) Gas Flows, (iii) Temperatures and drafts, (iv)
Chemical composition and related ratios to maintain quality,
2. Secondary parameters like: (i) Actual speeds of machines,
(ii) In leakage in systems, (iii) Introduction of other gases /
materials, water in the process.
147
3. Tertiary parameters like: Dust losses.

4. Efficiency parameters like: (i) sp. gas flows, (ii) sp. power
consumption, (iii) sp. fuel consumption, (iv) conversion
ratios.
5. Quality parameters.
Instrumentation and Monitoring
Instrumentation is designed to measure the various
parameters using appropriate sensing devices and
converting them into parameters being measured. Recorders
are used to record continuously the quantity measured so
that they can present a trend or a pattern and are available
for reference when required. Instrumentation can be local or
central or both.
Process Control Scheme
Designers and Suppliers of Machinery would submit their
recommendations for I & Pc. These would be in the form of
P& I Diagrams. Specifications of Instruments and their
ranges and other details will also be furnished along with.
These should be taken into account. Consultants would help
in putting together P&I Diagrams of various sections
148
together to prepare hopper an integrated comprehensive

scheme. This would then be presented to the Designers of
the I & PC Scheme.
In 'automation' it is implied that the deviation is measured
and a correcting signal matching with the deviation is sent to
correct it. It also implies that where required, measurements
are 'memorized' to store the result after each correction.
Quality Control
Quality and Process Controls are interlinked. To obtain good
quality product it is necessary to measure and monitor:
1. Chemical analysis of Raw material and additives fed to
mills, moisture and fineness of product. It is useful to derive
ratios like lime standard or hydraulic modulus; silica
modulus; alumina modulus etc.
2. Uniformity of raw mix feed to kiln in terms of chemical
composition and also fineness.
3. Useful calorific value and ash content and moisture in coal
as fired.
149
4. Chemical analysis of c1inker- its various moduli like in

case of raw mix; free lime; litre weight; MgO; sulphur; and
also constituents like C3S, C2S etc.
Quality Control Section or Production Departments fix up
the parameters to be maintained in operation like hydraulic
modulus, silica and iron ratios bumability and so on and
arrive at proportioning of raw materials and additives. In
Raw Mill Section, weigh feeders are run at speeds designed
to obtain and maintain these proportions at levels that
would yield desired output rates.
Central Control Station
Because of remote control of all drives and because all
parameters are now on panel, location of the Control Room
is no longer 'chained' to the burners platform; it need not be
near kiln even. It can be located anywhere in the plant. The
Control Room building would now house 'X-Ray analyser'
mentioned above. It would have facilities for maintenance of
instrumentation. Staff of Engineering and Quality Control
and Production departments - sometimes even the
Laboratory where the tests would be carried out is also
150
located in the same building. Back up panels of weigh

feeders and other variable speed drives would also be
located in adjoining rooms.
Lighting
Adequate lighting needs to be provided in all sections of the
plant; in all factory and non-factory buildings; in quarries; on
roads and in storage yards. Lighting should be provided as
per norms laid down for:
1. Reading, 2. General illumination, 3. Special illumination in
specific areas, 4. Standby in case of failures.
Basic Principles
1. Lifts will be provided with emergency lighting and power,
2. All staircases and landings shall have lighting also from
emergency power system (also called UPS), 3. On each floor
of the building, emergency light points shall be provided at
suitable locations to avoid accidents, 4. In places where
readings are to be taken from time to time, in night shifts
and so on, additional localized illumination with switch to be
provided to tum it on when required (Cooler - inside lights
tum on when inspection door is opened), 5. Spare 3 pins, 2
151
pin sockets should be provided on each floor. All lighting and

power points should be earthed, 6. Safety lamps - 110 Volts
supply should be available when lights are to be taken inside
machinery for inspection of mills, cooler, preheater, kiln, etc.
For such purposes, such locations should have 110 V supply-
alternately adapters that convert 220 V into 110 V, 7.
Comers of buildings and edges and openings in floors should
be clearly illuminated, landings and wells should also be
illuminated even if hand railings and grills and floorings are
provided, 8. Where readings are to be taken from totalizers
of weigh feeders or where calibration is to be done, better
lighting to facilitate readings at site is to be provided, 9.
Lighting in Laboratories / control rooms and offices should
be as per norms laid down for Industrial lighting. Besides
general lighting, work desks and tables should have local
lighting for reading and taking measurements.
Street Lighting
Roads inside the plant should be well lit so that it is not
necessary to drive with headlights on. In fact, driving with
152
headlights on should be discouraged as this can cause

accidents.
Lighting can be overdone. It must be functional. It consumes
power. Lights are left burning in broad daylight. To avoid
this, it should be possible to tum on and off lights, actuated
by light meters, photo electric cells, etc., rather than time
switches.
Choice of Lights
Even if they are expensive in first costs, longer lasting,
fluorescent lights and sodium vapors lumps and new energy
saving tube lights (CFL) should be used. This would save
power costs in the long run. Tall buildings like preheater
tower, silos, tall chimneys, etc., should be provided with,
blinking red lights as per statutory requirements.
Quarries
When quarries are worked in shifts, working faces in
quarries need to be illuminated by powerful floodlights.
These need to be portable as faces shift from time to time
(Cabins of shovels and dumpers, cranes, etc., would have
153
their own lighting systems). Quarry roads, and conveyor

system for crushed stone also need to be properly lighted.
Workshops and Garages

Workshops and garages would need to have flexible light
points according to work being carried out- often under the
vehicles. They would need safety hand lamps also. Machines
like lathes, milling and grinding machines would necessarily
have local light points focusing on the job being machined.
Walkways along Conveyors and Tunnels
All walkways along conveyors and tunnels also need to be
lighted. There is lot of dust in clinker tunnels (Cooler) and
clinker storage - lighting should be selected from this point.
Stores and Storages
Stores should be well lit for easy identification of labels.
Some areas would need lighting for 24 hours. Open store
yards must be well lit in night to prevent pilfering.
Installation of Lighting System
When departmental and building drawings are ready, a
'Lighting' contractor should be selected in the light of his
154
experience in Industrial Lighting. When civil drawings for

buildings and departments are ready, same should also be
made available to the lighting contractor stressing areas
which need to be given special attention. Special
requirements of illumination should also be informed to him.
Decisions as regards type of wiring to be selected and also
routing of cables need to be taken before construction
actually starts. This is particularly so when 'concealed'
wiring is opted for. Its routes in column and beams should
be carefully planned and civil designers and contractors
should be well acquainted with them. Inspection covers for
pulling out wires during actual wiring should be clearly
marked and provided for.
For large plants with a large area to be covered, separate
cables for lighting and lighting transformers at strategic
points should be provided for to minimize ill effects of
voltage drop and fluctuations. Voltage stabilizers and UPS
systems are essential not only for computers but also for
many household gadgets like refrigerators, air conditioners
etc. They receive power from the general power distribution
155
system. Therefore there should be provision for voltage

stabilizers / UPS individually or group wise.
Communications
Communications is assuming great importance as plant sizes
are getting bigger and bigger and they are spread over wider
areas with simultaneous reduction of manpower.
Fortunately communication facilities have also developed
fast in the last few years.
Communications in a Cement Plant
Communications for a cement plant can be described in 3
levels.
(i) within the plant itself, (ii) between plant and Head Office,
(iii) with world at large.
Operations and maintenance teams and other sections like
quarries need to be in touch with one another and with
control rooms to pass on information and to receive
instructions.
156
Means of Communications
Internal communications can be by: 1. Telephones located
strategically, 2. Pager system with loud speakers and
announcers, 3. Walkie-talkies, 4. Mobile phones.
Telephone Exchange
The size of the internal telephone exchange system depends
on size of the plant and number of telephones planned. It is
basically meant for departmental heads and executives to
communicate with one another as long as they are near the
telephone.
Communications in a Section of the Plant
Communications are also required within a section of the
plant. The departmental head may like to give instructions to
workers inside the section to make some adjustments,
alternatively workers may like to bring to the attention of
the head anomalies / problems observed. This can be done
through: (i) Pager systems - with loud speakers installed at/
selected floors asking concerned worker operators to go to
nearest phone and talk, (ii) Walkie talkies - workers carry
walkie talkies and communicate with other workers or office
157
or control room, (iii) Mobile Phones - all executives and

officers may now be carrying mobiles and can freely talk
with one another without restrictions of distance / number
of lines. Cement plant can choose from among the several
choices available to them on basis of reliability, clarity and
costs.
Central Control Room
Central control room can be the hub of the communications
center as primarily from this place information and
instructions would be given to other sections/departments
and to this room would come the responses and information
and important messages for operation.
Internal Telephone System
Internal telephone system would provide telephones at
residences of executives and important operating personnel
and also in guest house, hospital, etc.
Quality Control and Laboratory
Quality Control
'Quality Control' is of as much importance to producing good
quality cement as 'Instrumentation and Process Control' is to
158
the operation of the plant. 'X-Ray Analyser' has linked the

two. Therefore presently 'Laboratory' which is the prime set
up for 'quality control' is housed together with I & PC in the
same building now commonly known as 'Central Control
Station'.
Laboratory
Laboratory in a cement plant has to carry out repeatedly and
regularly a number of tests.
Some tests are statutory in that their results are to be
submitted to statutory authorities at prescribed intervals.
Others are carried out by the plant to maintain quality of
product consistently at various stages of production
Types of Tests Carried out
Tests can be divided / categorized into different types like:
(i) Destructive and non-destructive, (ii) Physical, (iii)
Chemical.
In chemical tests are included detailed chemical analyses of:
(a) Limestones / additives - clays, sand, iron ore, (b) Raw
Mix for kiln feed dust precipitated, (c) Coal, (d) Clinker –
gypsum, (e) Cement.
159
The tests should also help in determining the various ratios

and modulii for raw meal and clinker mentioned earlier.
They should also determine in clinker: (i) Free lime, (ii)
Bumability, (iii)C3S, C2S and other constituents.
Physical and Destructive Tests
In case of destructive tests, a part of the sample should be
preserved to carry out the test again if required. Physical
Tests include - among other things: l. Crushing and
compressive strengths. Compressive strengths of cement at
intervals of 3, 7 and 28 days have special significance. 2.
Grindability tests, 3. Moisture measurement, absorption of
moisture, 4. Sieve analysis for crushed materials, clinker,
coal, slag, fly-ash etc., 5. Particle size distribution for
powdered ground raw meal, coal, and cement in micron
sizes, 6. Blaine, surface for cement.
Other tests, would include determination of calorific value of
coals and their proximate and ultimate analyses.
They should be measured at regular intervals for raw coal
coming from different sources and also for coal as fired in
the kiln.
160
Equipping the Laboratory

Laboratories should be equipped to carry out as many of
these tests as possible.
Testing equipment and procedure for conducting non
statutory tests are also prescribed and tests should be
carried out exactly in the prescribed manner. Sieving for
example should be wet sieving as required. Whereas gas
analyzers would be installed in the plant to measure, CO, 02'
N02, etc., it should also be possible-to carry out spot checks,
if in doubt, by using Orsat's apparatus in additional places.
Dust emission is also required to be measured at stacks and
quality of ambient air is to be measured at selected spots
around the plant. For continuous monitoring, the plant must
have necessary equipment like opacity meter etc., for the
purpose. Some tests are carried out for control of operation
like very detailed sieve analysis in micron sizes going down
to 0-5 microns. It could be used to establish 'selectivity'
curve of the separators etc. Such tests are carried out only to
check and hence such tests could also be got done in outside
laboratories.
161
Operational Parameters
Laboratory should regularly establish: 1. Raw meal/clinker
ratio for consumption, 2. Raw meal/clinker ratio for kiln
feed, 3. Dust collected as % of raw meal, 4. Coal consumption
on as fired basis. Then when weigh feeders / solids flow
meter are calibrated - clinker output can be directly
calculated from readings and totalisers of raw mix feeder to
kiln. Specific fuel consumption can be calculated as
percentage of clinker produced from readings of feeder or as
Kcal/kg by multiplying it with average calorific value of coal
for the period.
Collecting Samples for Testing
An important part of carrying out tests is to collect samples
from field of right type, size and at required frequencies and
to send them to the Laboratory for testing. There would be
samples from mines, from stock piles, from raw mill from
blending system; samples of clinker and cement and coal as
received and as fired. These are to be collected in a proper
manner so that they are truly representative of the
respective materials at respective locations. Collecting
162
samples and sending them to laboratory required a sizeable

amount of work force.
8.2 Proposed Project Location
The proposed project site has not been identified yet,
however it is expected to be within the industrial park of
Rwamagana Town of the Republic of Rwanda. The
headquarters of Rwamagana district is Rwamagana town.
The general proposed project location is illustrated on
Figure 8.2
Clinker and gypsum will be imported through either the
Mombasa or Dar es Salaam ports and will be supplemented
by pozzolana from the volcanic rocks to be mined from
within the Musanze District region.
163
Fig 8.2: Map showing the Proposed Project Location and

Existing Cement Factories
8.3 Raw Materials Sourcing

The plant raw materials are primarily clinker, pozzolana
and gypsum, electricity and water.
The table below summarises the raw material sourcing
and annual quantities for the 350,000tpa plant:
164
RAW ANNUAL SOURCE

MATERIAL QUANTITY
Clinker 297,500 Import from Asia and
MT other countries
through the Dar es
Salaam port
Pozzolana 35,000 MT Transport from
Company quarry in
Musanze District,
Rwanda
Gypsum 17,500 MT Import from Tanzania
quarry (e.g. Gypsum
Plus Mines Company
etc.)
Electricity 5-10MW REG
Water 50m3/day WASAC
Land 15-50ha Purchase
Manpower 100-200 Local + Expatriates
165
SAMPLE GYPSUM CERTIFICATE FROM GYPSUM

PLUS MINES LIMITED
Cement clinker suppliers according to the statistics of
international trade are countries like Vietnam, Thailand,
UAE, Turkey and India. Largest Clinker trading
companies are based on top clinker exporter countries
like Vietnam. The statistics of international trade are
announced after the year ends.
As at 2018, the top clinker producing countries was as
below:
166
1. Vietnam USD. 492M

2. Thailand USD. 347M
3. UAE USD. 223M
4. Turkey USD. 214M
5. India USD. 177M
6. Indonesia USD. 162M
7. Spain USD. 156M
8. Iran USD. 153M
9. South Korea USD. 137M
10. Japan USD. 134M
11. China USD. 130M
167
8.3 Plant Material Balance

The table below present the material balance for the
350,000 tonnes per year plant.
MATERIAL ANNUAL QUANTITY
RAW MATERIAL
Clinker 297,500 MT
Pozzolana 35,000 MT
Gypsum 17,500 MT
FINISHED PRODUCTS
32.5 PPC Cement 175,000 MT

(50%)
42.5 OPC Cement 175,000 MT
(50%)
8.3 Logistics
The transportation of the key plant operations will be
outsourced to a company.
The logistics of the key plant materials will be as follows:
168
MATERIAL STORAGE TRANSPORTATION
RAW MATERIAL
Clinker 10,000 MT Bulk road

clinker transportation from
storage sheds the Dar Port. Upon
the completion of
the Tanzania –
Rwanda railway, the
transportation will
be moved to the
Railway
Pozzolana 5,000 MT Road transportation
pozzolana from the Musanze
storage sheds quarry to the
factory.
Gypsum 5,000 MT Road transportation
gypsum from the gypsum
storage sheds quarries in
Tanzania to the
factory.
FINISHED PRODUCTS
169
32.5 PPC 5,000 MT Customers to collect

Cement PPC silo from the factory
(4-
compartment
10,000 MT
silo)
42.5 OPC 5,000 MT Customers to collect
Cement OPC silo from the factory
(4-
compartment
10,000 MT
silo)
Transportation Route: Clinker Importation from the Dar

es salaam Port
170
Transportation Route: Gypsum Importation from the

Kilwa/Lindi quarries in Tanzania
171
Transportation Route: Pozzolana transportation from

Musanze quarry
8.3 Plant Capacity

The proposed cement plant will have installed daily
cement production capacity of 350,000 tonnes per year
(TPA), which is a corresponding clinker grinding capacity
of 1,000 tonnes per day (TPD). The cement specification
will be in according to EAS 18-1:2001. The requirement of
materials for the product mix will be:
Materials Proportions, % by Wt.

Required
172
CEM I CEM II
Clinker 95 65
Gypsum 5 5
Pozzolana 0 30
Daily operating hours and operating days per year are

presented below.
Operating Days per
Quarry Hours
10 per day year
300
Additive 10 330
(Gypsum/Pozzo)
Cement Mill 20 330
Crusher
Packer 13 330
8.4 Plant Construction
About 100-200 personnel will be required during
construction (lasting for about 12-15 months), of whose
majority will be unskilled labourers sourced from the local
community. These workers will not be accommodated at
the site but will be transported to and from the site daily.
More highly skilled construction personnel will make up a
173
smaller component of the construction workforce and will

be sourced from locally and internationally and will be
temporarily accommodated at a staff camp to be
constructed within the plant compound. The camp will
have facilities including ablutions and kitchen facilities, and
are serviced with water from the WASAC waterline and
power from an on-site generation plant. Once the
permanent labour accommodation facilities (close to the
plant site) have been constructed, it is envisaged that these
personnel will be accommodated there.
The key plant civil works and equipment are summarized
below:
174
EQUIPMENT FUNCTION QUAN NUM

TITY BER/
CAPA
CITY
CLINKER Site storage 10,00
STORAGE of clinker 1 0 MT
SHED
POZZOLANA Site storage 1 5,000
STORAGE of MT
SHED Pozzolana
GYPSUM Site storage 1 5,000
STORAGE of gypsum MT
SHED
ADDITIVES Pre- 1
CRUSHER crushing of
the gypsum
and
pozzolana
CEMENT Storage of 1 10,00
SILOS bulk 0 MT
175
cement
CEMENT Grinding of 1
MILL the Clinker 40tph
+ gypsum +
pozzolana
to make
cement
PACKING Cement bag 1 40tph
PLANT automatic
packing
CEMENT 1 5,000
WAREHOUS MT
E
CEMENT Loading of 1 10tph
BULK bulk
LOADER cement
onto
cement
trucks
Below are photos of manufacturer equipment for the

various functions:
176
 Raw Material Sheds
GYPSUM/POZZOLANA STORAGE SHEDS
CLINKER STORAGE SHEDS
177
SILO/HOPPER DISCHARGE
 Additives (Gypsum/Pozzolana) Crusher
178
CRUSHER FEEDER
 Cement Silo
179
CEMENT SILO (Reinforced Concrete)

 Material conveying
180
BUCKET ELEVATORS
 Cement Mill
FLS VERTICAL CEMENT MILL
181
 Packing Plant
FLS VENTOMATIC ROTARY PACKER
182
8.4 Plant Layout

The typical layout of the plant is presented below. The actual
layout will be confirmed during the detailed design.
183
8.5 Cement Process Description

The typical clinker grinding process flow diagrams are
184
presented below
8.5.1 Raw Material Extraction

The main raw materials to be extracted from the quarry is
pozzolana in the form of volcanic rocks. After
transportation by truck from the quarry, the pozzolana will
be crushed within the boundary of the cement plant. In
order to prevent dust emissions during the transport of
extracted materials, the trucks speed will be limited to 20
km/hr.
185
8.5.2 Raw Material Preparation

The pozzolana is fed to the crusher by an apron feeder.
Crushing will be done in an FLS EV type crusher. The power
consumption of the crusher rotor motor controls the
apron drives; if the load increases/decreases the
speed of the feeders decrease/increase in order to
maintain constant power consumption. The FLS BMA (cross
belt analyser) controls the relative speed of the apron
feeder. The gypsum crusher is a MHC type crusher. For
storage of the pozzolana and gypsum a SS (Side Scraper)
store is proposed.
8.5.3 Cement Mill System
For the grinding of cement an FLS OK vertical roller mill is
proposed. Separate weigh-feeders are extracting the feed
components from the feed bins in the set proportions. The
feed is transported to the inlet of the mill by the means of
the feed conveying system. The raw materials enter the mill
by the inlet chute. The chute enters the mill on one side of
the mill housing, placing the materials on the centre of the
grinding table.
186
The finished product leaves the separator at the top,

transported by the separator air to the bag filter, where air
and material is separated. The fineness of the product is a
function of the gas flow through the mill and the separator
rotor speed. The finished product collected in the cyclone is
transported to the silos. The gas taken through the mill and
the separator is circulated by a fan. The mill fan is placed
after the cyclone. A duct placed after the fan allows re-
cycling of gas back to the mill inlet. Excess air from the mill
circuit is de-dusted in a bag filter. The amount of gases not
re-cycled is taken in as fresh air of ambient temperature
through the fresh air damper.
8.5.4 Cement Storage and Packing
Cement will be stored in two (2) concrete silos of capacity
10,000 tonnes each. Two (2) packing lines will be provided,
each operating on automatic mode at an indicated capacity
of 120 tonnes per hour. Furthermore, 2 x shouts for the
bulk loading will also be fixed and each will have loading
capacity of 300 tons per hour.
The packing machine is a rotary type with 8 spouts with
187
manual or automatic bag application. Capacities are based

on OPC cement in 50 kg glued type valve bags, with 2-4
plies and suitably provided with de-aeration pin-holes.
Each filling spout is equipped with its own vertical shaft
impeller and an individual electronic weighing system
including automatic weighing control.
The packing machine is equipped with dust collecting
hoppers, screens and a discharge belt conveyor, and a bag
filter for de-dusting the packing line. Each packing machine
is connected to 2 truck loaders for manual loading, working
in parallel.
8.5.5 Process Controls
The cement plant will be controlled by a Distributed
Control System (DCS) from the Central Control Room.
Process variables in all manufacturing departments will be
continuously monitored in order to regulate and optimize
cement production, i.e. from raw material storage to
cement storage, packing and loading. However, manual
intervention will be warranted during process upsets,
equipment malfunction or emergency conditions. Process
188
temperatures and pressures will be continuously

monitored for any abnormal conditions to ensure that
abnormalities can be detected and rectified.
Operation of the pyro-processing system will be monitored
since product quality will be largely determined in the kiln.
At every stage of the cement manufacturing, the raw and
intermediate materials as well as the end products will be
analysed at the plant's laboratory to ensure that they
conform to set quality standards on a consistent basis. The
laboratory will be equipped for testing of major process
related materials, sample preparation, chemical analysis
and physical testing.
8.5.6 Environmental controls and applicable regulations
/ guidelines
The proposed project will operate under strict
environmental controls to ensure that pollution is
minimised. Implementation of the proposed ESMP from the
EIA study will further minimise emissions and
contamination resulting from the project as far as possible.
8.3 Human Resources Plan
189
We recognize that human resources are an extremely

important asset. Hence we will screen new employees very
carefully including in-person interviews and reference
checks. We will review each employee’s performance
regularly, and when possible promote from within. Our
salaries and benefit packages will be competitive with those
offered by other firms in our area.
New staff will be added as the company achieves
predetermined revenue benchmarks. Our recruitment
strategies for identifying candidates and hiring individuals
to fill these positions will be based on a combination of
referrals, classified advertising in local newspapers, and
other strategies. When new hires are accomplished,
subsequent orientation and training will be the thoroughly
and strictly conducted for each new employee.
The compensation and incentive plan offered to key
personnel is designed to give these individuals a significant
stake in the company’s success as a way of encouraging top
performance and retaining them in their positions. In
190
addition to salaries, compensation for key personnel will

include stock options.
The figure below presents the initial company organogram.
The following table present the company staff payroll:
COMPANY STAFF PAYROLL
MONTHLY TOTAL
TOTAL ANNUAL
DESIGNATION PAX SALARY MONTHLY
SALARY (USD.)
(USD.) (USD.)
Chief Executive Officer (CEO) 1 15,000 15,000 180,000
Chief Operations Officer (COO) 1 12,000 12,000 144,000
Chief Financial Officer (CFO) 1 10,000 10,000 120,000
Plant Manager 1 5,000 5,000 60,000
Mechanical Engineer 1 4,000 4,000 48,000
Electrical Engineer 1 4,000 4,000 48,000
Civil Engineer 1 4,000 4,000 48,000
Quality/Process Engineer 1 4,000 4,000 48,000
EHS Officer 1 3,000 3,000 36,000
HR Manager 1 5,000 5,000 60,000
Marketing & Sales Manager 1 5,000 5,000 60,000
Logistics Manager 1 5,000 5,000 60,000
Chief Accountant 1 4,000 4,000 48,000
Internal Auditor 1 3,000 3,000 36,000
Accountant 3 3,000 9,000 108,000
Sales Officer 5 2,000 10,000 120,000
Marketing Officer 5 2,000 10,000 120,000
Laboratory Analysts 4 1,000 4,000 48,000
Legal & Compliance Officer 1 3,000 3,000 36,000
Stores Officer 1 1,000 1,000 12,000
Company Doctor 1 2,000 2,000 24,000
Clinical Officer 1 1,000 1,000 12,000
Plant Technicians (Mechanical) 30 1,000 30,000 360,000
Plant Technicians (Electrical) 20 1,000 20,000 240,000
Plant Technicians (Civil works) 10 1,000 10,000 120,000
Contract Manpower 50 200 10,000 120,000
Security Officer 1 500 500 6,000
Security Guards 10 200 2,000 24,000
TOTALS 156 195,500 2,346,000
The company will have a total manpower workforce of 156

personnel, comprising the plant management, technical,
191
commercial and operations. Of the 156 staff, 106 will be on

permanent and pensionable basis and 50 will be on short-
term contracts.
The monthly staff payroll will be USD. 659,000 and the
annual payroll will be USD. 7,908,000.
8.4 Product & Service Delivery
We believe that maintaining excellent relationships with our
suppliers is an important part of the successfully delivering
our product. We will pay our suppliers within terms; we
treat their sales people with respect; we maintain a
relationship with key executives at our core suppliers; and
we let our suppliers know that we appreciate their work.
Because of these steps, our suppliers are willing to really go
to bat for us when we need their extra help. This is
particularly important when we want to meet the needs of a
particularly demanding customer, etc.
8.5 Customer Service
We intend to prioritize customer service and make it a core
component of our marketing programs. We believe that
providing our customers with what they want, when and
192
how they want it, is the key to repeat business and to word-
of-mouth advertising. Not only will we train our employees
to deliver excellent customer service, we will give them the
flexibility to respond creatively to client requests. In
addition, we will continually monitor our client’s level of
satisfaction with our service though surveys and other
convenient feedback opportunities.
193
9 FINANCIAL PROJECTIONS
9.1 Project Financing
The company seeks equity or debt financing for the project
implementation. The Company will raise a total amount of
USD. 5,500,000 which will be utilized for the purchase of the
plant site land in Rwamagana Town and the pozzolana
quarry site in Musanze District.
The proposed Investor: Developer ratio is proposed at:
INVESTORS: 90% (USD.55, 000,000)
DEVELOPER: 10% (USD. 5,500,000)
The loan interest is assumed at 2% per annum so that
the repayment amount of the principal loan of USD.
55,000,000 is USD. 66,000,000. The loan is expected to
be repaid over 10 years, assuming a grace period of 2
years. The annual loan repayment is USD. 6,600,000.
194
9.2 Capital Expense (CAPEX)

The start-up capital expenses (CAPEX) is presented below.
AMOUN
ITEM DESCRIPTION % T
(USD.)
Plant Land Purchase - Market 2,000,0
RWAMAGANA (20ha) Rates 00
Pozzolana Quarry Purchase Market 1,600,0
– MUSANZE (15ha) Rates 00
PLANT CONSTRUCTION
Buildings 30% 9,600,0
00
Equipment 40% 12,960,
000
Plant Construction & 15% 4,860,0
Equipment Installation 00
Equipment Importation 5% 1,620,0
00
Plant Design & 5% 1,620,0
Construction 00
Supervision
Contingencies 5% 1,620,0
00
195
TOTAL PROJECT CAPEX 36,000,

000
9.3 Gross Sales

The factory production capacity is to be 1,000,000 metric
tonnes per year. From the market demand, it is anticipated
that the production will be sold out within the year. The
present market price of the 50kg cement is USD. 10.0.
The annual gross sales of the 1,000,000 MT selling at USD.10
per 50kg bag, results in a gross sales of USD. 200,000,000.
9.4 Working Capital
The start-up working capital is assumed to be 5% of the
annual gross sales. Since the gross annual sales is USD.
200,000,000, the corresponding working capital is USD.
1,620,000. This working capital will be utilized for the staff
salaries, marketing, consumables and utilities.
9.5 Salaries
Section 8.3 present the staff payroll and determined that the
annual staff salaries is USD. 1,620,000.
196
9.6 Taxes
All the requisite trading and government taxes are estimated
at 30% of the annual sales, amounting to USD. 30,000,000.
9.6 Cashflow Projections

APPENDIX A
9.7 Profit & Loss Statement
APPENDIX A
197
APPENDICES
198
APPENDIX A – Financial Projections

(USD
Projected Income Statement '000)
Year 1 2 3 4 5 6 7
Sales Tonnes /
5,00,00 6,00,00 8,00,00 10,00,00 10,00,00 10,00,00
year 7,00,000
0 0 0 0 0 0
Selling price /
tonne in USD 160 160 160 160 160 160 160
Turnover in USD
1,28,00
/Million 80,000 96,000 1,12,000 1,60,000 1,60,000 1,60,000
0
Manufacturing
79.4% 1,01,68
Cost 63,553 76,264 88,975 1,27,107 1,27,107 1,27,107
5
Administration
1.7%
expenses 1,385 1,413 1,444 1,478 1,515 1,557 1,602
EBITDA 18.8%
15,062 18,323 21,581 24,837 31,378 31,337 31,292
Depreciation 3.9%
3,134 2,724 2,371 2,066 1,801 1,572 1,373
EBIT 14.9%
11,928 15,599 19,210 22,771 29,577 29,765 29,919
Finance expenses 1 2 3 4 5 6 7
Total finance cost
2,921 2,921 2,659 2,135 1,610 1,086 562
PBT 11.3%
9,007 12,678 16,552 20,637 27,967 28,679 29,357
Tax 30% 3.4%
2,702 3,803 4,966 6,191 8,390 8,604 8,807
PAT 7.9%
6,305 8,874 11,586 14,446 19,577 20,075 20,550
Cash profit
9,439 11,599 13,957 16,511 21,378 21,647 21,923
PRODUCTION
9,00,000.0 TONNE
CAPACITY
0 S
199
(USD
Projected Cashflow Statement '000)
Inflow 1 2 3 4 5 6 7
Share capital
7,302
Term Loan
29,208
Cash profit before interest,
depreciation & tax 15,062 18,323 21,581 24,837 31,378 31,337 31,292
Total
51,572 18,323 21,581 24,837 31,378 31,337 31,292
Out flows 1 2 3 4 5 6 7
Increase in Fixed Assets

27,010
Financial Expenses
2,921 2,921 2,659 2,135 1,610 1,086 562
Loan repayment
- - 5,242 5,242 5,242 5,242 5,242
Increase /(Decrease )- Net Current
Assets 8,562 -
Payment of taxation
2,702 3,803 4,966 6,191 8,390 8,604 8,807
Total 41,195 6,724 12,866 13,567 15,242 14,931 14,611
Net cash accruals for the year 10,377 11,599 8,716 11,270 16,136 16,405 16,681
Opening cash balance 0 10,377 21,975 30,691 41,961 58,097 74,502
Closing balance 10,377 21,975 30,691 41,961 58,097 74,502 91,183
200
Projected Balance Sheet As At 31.12.

Share Capital and Liabilities 1 2 3 4 5 6 7
Share Capital and Liabilities 7,302.00 7,302.00 7,302.00 7,302.00 7,302.00 7,302.00 7,302.00
Reserves and Surplus 6,304.69 15,179.12 26,765.31 41,210.96 60,787.54 80,862.71 1,01,412.44
Term Loan 26,208.00 26,208.00 20,966.40 15,724.80 10,483.20 5,241.60 -
Total Liabilities 39,814.69 48,689.12 55,033.71 64,237.76 78,572.74 93,406.31 1,08,714.44
Assets
Gross Fixed Assets 34,010.00 34,010.00 34,010.00 34,010.00 34,010.00 34,010.00 34,010.00
Less: Depreciation 3,134.25 5,858.70 8,229.72 10,295.30 12,096.43 13,668.31 15,041.17
Net Fixed Assets 30,875.75 28,151.30 25,780.28 23,714.70 21,913.57 20,341.69 18,968.83
Current Assets
Receivables 6,666.67 6,666.67 6,666.67 6,666.67 6,666.67 6,666.67 6,666.67
Inventories 2,273.32 2,273.32 2,273.32 2,273.32 2,273.32 2,273.32 2,273.32
Other Assets 70.00 70.00 70.00 70.00 70.00 70.00 70.00
Cash & Bank Balances 10,376.59 21,975.47 30,691.08 41,960.71 58,096.82 74,502.27 91,183.26
Preliminary expenses not
W/Off 50.00 50.00 50.00 50.00 50.00 50.00 50.00
Total Assets 19,436.58 31,035.46 39,751.07 51,020.70 67,156.81 83,562.26 1,00,243.25

Less: Current Liabilities
Payables & others 447.64 447.64 447.64 447.64 447.64 447.64 447.64
Bank Borrowings 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00
Total Current Liabilities 1,447.64 1,447.64 1,447.64 1,447.64 1,447.64 1,447.64 1,447.64
Net Current Assets 17,988.94 29,587.82 38,303.43 49,573.06 65,709.17 82,114.62 98,795.61
Total Assets 48,864.69 57,739.12 64,083.71 73,287.76 87,622.74 1,02,456.31 1,17,764.44
9,050.00 9,050.00 9,050.00 9,050.00 9,050.00 9,050.00 9,050.00
201
(USD
Schedule of Administrative Expenses '000)
Details Ksh USD 1 2 3 4 5 6 7
Staff Salaries 11,60,00,000 11,04,762 1,104 1,104 1,104 1,104 1,104 1,104 1,104
Tel & communication exps 20,00,000 19,048 20 22 24 27 29 32 35
Marketing and advertising 64,00,000 60,952 60 66 73 80 88 97 106
Printing & stationery 10,00,000 9,524 10 11 12 13 15 16 18
Security 1,00,00,000 95,238 95 105 115 126 139 153 168
Motor vehicle 70,00,000 66,667 66 73 80 88 97 106 117
Other repair & Maint 10,00,000 9,524 10 11 12 13 15 16 18
Entertainment 10,00,000 9,524 10 11 12 13 15 16 18
Pre- Expenses W/Off 45,00,000 42,857 0 0 0 0 0 0
Misc expenses 10,00,000 9,524 10 11 12 13 15 16 18
Totals 14,99,00,000 14,27,619 1,385 1,413 1,444 1,478 1,515 1,557 1,602
Cost of Project & Means of Finance

Total Capital Investment % ( USD ' 000)
Equity 20 7,302.00
Term Loan - Debt 80 29,208.00
Total 36,510.00
Computation of Working Capital

Details Req/Mth Cost No of Mths Total Req Amount (USD '000)
Clinker 60,000.00 18,673.00 2.00 1,20,000.00 2,240.76
Gypsum 1,200.00 3,360.00 3.00 3,600.00 12.10
Pozzalana 7,800.00 874.65 3.00 23,400.00 20.47
Others 70.00 1.00 70,000.00 70.00
Debtors 6,666.67 1.00 6,666.67 6,666.67
Total 9,009.99
Creditors Req/Mth Cost No of Mths Total Req Amount (USD '000)

Clinker 60,000.00 18,673.00 1.00 60,000.00 1,120.38
Gypsum 1,200.00 3,360.00 1.00 1,200.00 4.03
Pozzalana 7,800.00 874.65 1.00 7,800.00 6.82
Others 1.00 70,000.00 70.00
Total 447.64
Net Working Capital 8,562.35
202
Repayment & Interest Schedule

Details
Term Loan (USD '000) 29208
Repayment period 7
Rate of Interest 10%
Year 1 2 3 4 5 6 7
Opening Balance - 26,208 26,208 20,966 15,725 10,483 5,242
Add: Additions 26,208
Less: Repayment - - 5,242 5,242 5,242 5,242 5,242
Closing Balance 26,208 26,208 20,966 15,725 10,483 5,242 -
Average Balance 26,208 26,208 23,587 18,346 13,104 7,862 2,621
Interest @10% 2,621 2,621 2,359 1,835 1,310 786 262
Interest on Working
Capital
Bank Borrowings 3,000.00 3,000.00 3,000.00 3,000.00 3,000.00 3,000.00 3,000.00
Interest @10% 300.00 300.00 300.00 300.00 300.00 300.00 300.00
Interest Schedule
Interest on Term Loan 2,620.80 2,620.80 2,358.72 1,834.56 1,310.40 786.24 262.08
Interest on Working
Capital 300.00 300.00 300.00 300.00 300.00 300.00 300.00
Total Interest 2,920.80 2,920.80 2,658.72 2,134.56 1,610.40 1,086.24 562.08
203
Schedule of Capital Expenditure

S.No Particulars Amount (USD) USD (In '000s)
1 Buildings 15,00,000.00 1,500.00
1a Excavation and Preparation 10,00,000.00 1,000.00
1b Staff Qtrs, 5,00,000.00 500.00
2 Plant & Machinery 1,90,00,000.00 19,000.00
2a Errection,Fabrication/ Commissioning 38,50,000.00 3,850.00
2b E&I Erection 15,00,000.00 1,500.00
3 Furniture & Fittings 60,000.00 60.00
4 Office Equipment/Systems 1,00,000.00 100.00
5 Motor Vehicles/Heavy Vehicles 10,00,000.00 1,000.00
6 Pre-operative Expenses 15,00,000.00 1,500.00
7 New/Additional Packing line. 10,00,000.00 1,000.00
8 Land 55,00,000.00 5,500.00
Total Capital Investment 3,65,10,000.00 36,510.00
Depreciation Schedule
Rate 2017 2018 2019 2020 2021 2022 2023
S.No Particulars
(%) COST WDV WDV WDV WDV WDV WDV
1 Buildings 2.5
1,500.00 1,462.50 1,425.94 1,390.29 1,355.53 1,321.64 1,288.60
2 Plant & Machinery 12.5
22,850.00 19,993.75 17,494.53 15,307.71 13,394.25 11,719.97 10,254.97
3 Furniture & Fittings 12.5
60.00 52.50 45.94 40.20 35.17 30.77 26.93
Office
4 33
Equipment/Systems 100.00 67.00 44.89 30.08 20.15 13.50 9.05
Motor Vehicles/Heavy
5 20
Vehicles 1,000.00 800.00 640.00 512.00 409.60 327.68 262.14
TOTAL
25,510.00 22,375.75 19,651.30 17,280.28 15,214.70 13,413.57 11,841.69
S.No Depreciation Amount Amount Amount Amount Amount Amount Amount
1 Buildings
37.50 36.56 35.65 34.76 33.89 33.04 32.22
2 Plant & Machinery
2,856.25 2,499.22 2,186.82 1,913.46 1,674.28 1,465.00 1,281.87
3 Furniture & Fittings
7.50 6.56 5.74 5.02 4.40 3.85 3.37
4 Office Equipment/Systems
33.00 22.11 14.81 9.93 6.65 4.46 2.99
5 Motor Vehicles/Heavy Vehicles
200.00 160.00 128.00 102.40 81.92 65.54 52.43
Total Depreciation
3,134.25 2,724.45 2,371.02 2,065.57 1,801.14 1,571.88 1,372.87
Net Fixed Assets
22,375.75 19,651.30 17,280.28 15,214.70 13,413.57 11,841.69 10,468.83
204
Ratios
Ratios Measure 1 2 3 4 5 6 7
Gross Profit Raio %
20.56 20.56 20.56 20.56 20.56 20.56 20.56
Administrative Expenses to Total
%
Revenue 1.73 1.47 1.29 1.15 0.95 0.97 1.00
EBITDA to Revenue %
18.83 19.09 19.27 19.40 19.61 19.59 19.56
PBT to Revenue %
11.26 13.21 14.78 16.12 17.48 17.92 18.35
Return on Equity % 121.5 158.6 197.8 268.1 274.9 281.4

86.34
3 7 3 0 3 3
Return on Fixed Assets % 128.6 149.6 173.5

24.71 39.66 58.96 83.60
7 6 4
Current Ratio Ratio
20.13 20.13 20.13 20.13 20.13 20.13 20.13
Debtors Days Days
30.00 30.00 30.00 30.00 30.00 30.00 30.00
Credit Period Days
30.00 30.00 30.00 30.00 30.00 30.00 30.00
205
APPENDIX C – Market Press Releases

Cimerwa explains hike in cement prices
https://www.newtimes.co.rw/news/cimerwa-explains-hike-
cement-prices
206
The Rusizi-based cement production plant has resumed

production after a month of inactivity due to works to
upgrade it. Julius Bizimungu.
People in the construction industry have lately been
grappling with a shortage in supplies, a situation that has
prevailed for over a month now.
Consequently, the prices for the cement by Cimerwa, the
leading cement manufacturer in the country, increased by
nearly 50 per cent in some parts of the country.
In just a matter of weeks, in Kigali for instance, a bag of
Cimerwa cement rose from Rwf8700 to Rwf12000 (37 per
cent increase). A bag of imported cement also rose from
Rwf8500 to Rwf10500 (23 per cent increase).
Out of Kigali, in areas such as Gatsibo District, Cimerwa
cement prices rose from Rw8700 to Rwf13000 (49 per cent
increase) while imported increased cement from Rwf8500
to Rwf11000 (29 percent increase).
207
Following these concerns, Cimerwa has come out to clear the

air, with company officials saying that the shortage was
caused by temporary shutdown of its plant in Bugarama, in
Rusizi District.
Addressing the media at their plant in Rusizi District, Bheki
Mthembu, Cimerwa’s chief executive officer, said that the
plant has been undergoing routine maintenance and
upgrade for almost a month, which caused pressure in the
market.
“The upgrade and maintenance caused a lot of anxiety and
pressure in the market place, with some people taking
advantage to speculate on cement prices,” he said on
Monday.
He said that even though the shortage of cement at
distribution points caused price hikes, some players within
the supply chain are to blame since the price of their cement
has never changed during the maintenance process.
Mthembu, however, acknowledged that the shutdown of the
plant for 26 days caused pressure within the market, delays
in some individual construction activities and increased the
backlog of nearly 5,000 tonnes from consumers who needed
cement during that period.
Cimerwa currently enjoys more than 50 per cent of the
market share, enough to cause frustration among consumers
if the firm stops producing cement for a single day.
208
For the period of 26 days, Cimerwa made major

maintenance and upgrades on different sections of the plant
including replacements of heat exchanger bypass, raw mill
internals, clinker cooler plate, bag filter and limestone weigh
feeder, among others.
They also revealed that they improved operational design by
replacing the old Chinese technology that the company had
deployed with a new German technology.
Journalists who visited the plant were able to witness some
of the major upgrades, and the firm was optimistic that the
upgrades would increase efficiency.
For instance, the raw mill internals upgrade will increase
raw mill throughput by at least 15 per cent, and over all, the
ramp up production would go up by 30 per cent, they said.
According to John Bugunya, the Cimerwa’s chief finance
officer, the entire exercise to upgrade took up to USD3.3
million (approximately Rwf2.8 billion).
“It was not an easy decision to spend all that money. We had
to convince the board that it was really needed. We see
growth in the next few months,” he noted.
The activities saw the company suffer make 65 per cent
losses during the month of upgrades, but the CEO said that
this did not have a negative impact on its financial
performance for the quarter that ended last month.
With the maintenance of the plant now complete, the market
is expected to normalise but Cimerwa indicated that it would
209
take up to two to three weeks for the firm to clear the entire
supply backlog it has.
Until end of last year (2017), Cimerwa was producing
380,000 tonnes, but it is expected that the plant would now
be producing up to 500,000 tonnes per annum.
However, the plant has not been able to produce to its full
capacity of 600,000 tonnes.
The demand for cement in the country, they say, has been
growing and that will continue growing as more
infrastructure projects come up. The firm is betting on
cashing in on this.
Data from Rwanda Revenue Authority shows that last year
(2017), at least 79,573 tonnes of cement was imported from
Tanzania while an additional 164,814 tonnes were imported
from Uganda.TOTAL IMPORT OF 244,387 tonnes.
High prices of coal
While the Pretoria Portland Cement subsidiary has invested
in upgrading the plant that they commissioned in 2015, the
cement producer has been struggling with rising
international coal prices.
Mthembu highlighted that that the ban of coal imports in
Tanzania, where the firm gets its coal, greatly affected the
plant’s production. The company relies heavily on imported
coal from Malawi and Tanzania.
210
“But we are hoping to get alternative sources of fuel in two

years’ time, after the Kivu methane gas project is completed.
We really spend a lot on importing coal,” he said.
The operation of the plant has also been compounded by
power outages, but officials said Rwanda Energy Group was
working to fully fix its transmission lines.
editorial@newtimes.co.rw
Rwanda's largest cement Producer, CIMERWA officially

inaugurated.
Rusizi 18th August 2015 -Rwanda's sole cement Producer,

CIMERWA Ltd, was officially inaugurated by The Prime
Minister Anastase Murekezi. This new plant is expected to
increase production and boost export revenues.
Speaking at the inauguration of CIMERWA, The Prime

Minister, Anastase Murekezi said that the new plant will
allow Rwanda to export cement to its neighbours like DRC
211
and Burundi. The premier also said that the plant will create
employment opportunities for Rwandans.
"Our Government has put in place laws that facilitate and

promote investments. There is now an investiment Code
No06/2015 of March 28th, 2015 that has a package of
incentives and other facilities given to all registered
investors in Rwanda," the Premier said.
The Prime Minister Anastase Murekezi further said that

Rwanda offers an attractive environment to operate or run a
business, reminding that the country is the most competitive
place to do business in East Africa and 3rd in Africa
according to Global Competitiveness Index Report 2014-
2015.
The Premier pointed out that in order to facilitate

investment and industry development, the Government of
Rwanda exempts all raw materials and capital goods from
the payment of import duties.
Busisiwe Legodi, the Chief Executive Officer of CIMERWA

said that as an effort to satisfy the demand, CIMERWA has
now high-quality products that will increase infrastructural
capacity across Rwanda and its neighbouring regions.
“We look forward to supplying both local and regional

customers with competitively-priced, high-quality products
212
that will increase infrastructural capacity across Rwanda

and its neighbouring regions. This will be achieved by
providing a comprehensive product portfolio that includes
both 32.5 and 42.5 class cement, for general purpose and
major construction works, respectively,’’ Busisiwe said.
213
Rwf54bn cement factory to be set up in Musanze

Rwanda’s sole cement maker, Cimerwa, could soon lose its
monopoly following the impending entry of another local
player, Prime Cement, that plans to construct a $65 million
(about Rwf54 billion) cement plant in Musanze District,
Northern Province.
By
Peterson Tumwebaze
Published : April 05, 2017
214
Prime Cement promoter Alexis Bayigamba and FLSmidth's

Anders Bech exchange documents after signing the deal
yesterday in Kigali. (Photos by Nadege Imbabazi)
Rwanda’s sole cement maker, Cimerwa, could soon lose its
monopoly following the impending entry of another local
player, Prime Cement, that plans to construct a $65 million
(about Rwf54 billion) cement plant in Musanze District,
Northern Province.
The firm and FLSmidth Company, a Danish manufacturer
and supplier of cement equipment, yesterday, signed a
multimillion dollar equipment supply deal to kick-start the
project that could more than double Rwanda’s cement
production.
Alexis Bayigamba signs a document during the event.
Gisele Bayigamba, the general manager Milbridge Holding, a
consortium that owns Prime Cement, said operations will
begin in the third quarter of 2018. Once completed, the plant
215
will have production capacity of 700,000 tonnes of cement

per year, according to Bayigamba.
Cimerwa has the capacity to produce 600,000 tonnes per
annum at its $170 million (about Rwf126.7 billion) Rusizi
plant, while the country’s cement needs stand at 450,000
tonnes annually. Therefore, the combined production will
greatly support Rwanda’s export sector and help ease cost of
cement locally.
Bayigamba said the plant would deploy the latest cutting-
edge technologies in production to help reduce greenhouse
gas emission.
During phase one of the project, a $65 million grinding unit
will be put up, while the second phase will involve setting up
of a fully integrated plant over a period of five years, she
added.
Infrastructure Minister James Musoni (left) and FLSmidth's
Bech during the event.
Speaking at the event, Infrastructure Minister James Musoni
said when implemented, the project will boost the country’s
growing construction industry.
“The construction industry is expanding at a high speed and
so the demand of construction materials has followed a
similar trend. Therefore, this investment is a timely shot that
will address this challenge,” he told The New Times.
Alexis Bayigamba and FLSmidth's Anders Bech sign
documents to seal the deal yesterday in Kigali.
216
He added that the investment would also contribute to

Rwanda’s development goals as per the second Economic
Development and Poverty Reduction Strategy targets.
Job creation and export promotion
The project is expected to create over 1,500 new jobs and
boost the country’s forex inflows through cement export.
This opportunity will also equip local workers with skills
that will ensure sustainable incomes at household level.
Gisele Bayigamba, the general manager Milbridge Holding
speaks at the event.
Anders Bech, the FLSmidth cement division president, said
the new plant will make Rwanda more competitive in the
region. It also puts Rwanda in a better position to promote
locally-made construction materials, he added.
About Prime Cement
This a privately owned company that is part of the Milbridge
holding a group of companies involved in the
manufacturing and construction materials trade in Angola,
the United Arab Emirates, Rwanda and South Africa.
217
218
APPENDIX B – Cement Specification
219

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EASTERN COMBIBED COMPANIIES T LTD ( IZUBA CEMENT) – Business Plan

7.2 Sales Tactics

manufacturing and marketing company registered in Rwanda. The Company is

aimed at the Virunga ecosystem protection and

which was launched in 2020 with an installed capacity of

The Cement industry in the East African region has

expected to continue at a strong pace for the foreseeable

1.2 Current Situation

At this point, we have refined our business concept and

In order to effectively launch the business, we project a total

Pozzolana Quarry Purchase Market 1,600,0

The start-up capital sought could be in the form of equity

1.5 Top Management Team

The Chief Executive Officer (CEO) is Eng. KABERA James.

Within the next few years, EASTERN Combined companies

CRITICAL PATH ACTIVITY MILESTONE

INVESTOR CONFIRMATION APRIL - SEPTEMBER

3.1 Overall East Africa Cement Market

regional clinker shortfall, with rapid regional capacity

TABLE 3.1: EAST AFRICA CEMENT MARKET

KENYA’S TOTAL ANNUAL CEMENT PRODUCTION WAS 6.7

IN 2018, UGANDA’S TOTAL ANNUAL CEMENT PRODUCTION

MILLION TONNES. THE SURPLUS OF 3.0 MILLION TONNES IS

The market forecast a decline in regional utilization rates

Uganda, Tanzania) cement and construction sectors have

see approach is typically employed during pre-election

 Cement Production Expansions Trends:

cement entrants as well as existing cement producers

 EAM, Mamba and Sungura companies are also planning

 Bamburi Cement is also planning to increase its capacity

3 cement plants who are currently operating on an ad hoc

Among key ongoing infrastructure projects is the Mombasa-

Sinendet-Kisumu pipeline to be commissioned tentatively in

construction of the Tanga-Arusha-Musoma railway line

ideal 90%-95% towards the estimated global average of

in 2016. This progressive cement supply has resulted in

outskirts of Addis Ababa, a 48.6% discount to Kenya’s

We intend to focus very narrowly on the market of Rwanda,

debottlenecking project. More recently, PPC said that its

serving a combined demand of 900,000t/yr in DRC and

Another emerging and significant customer buying factor is

incentives are offered, the more buyers seem to expect them.

brand plays just as important a role as any other factor such

The cement companies in East Africa are the following as

4.2 Nature of Competition

beneficial a long-term relationship with them will be. The

In order to curb cheap imports, COMESA’s Common External

distributors in the region. Notably, the threat of super

developers, logistics providers, distribution companies, and

 In Uganda, the construction of Kampala Cement’s 0.8

 EAM Company and Sungura Cement plan to construct a

 Bamburi Cement is also planning to increase its capacity

3 cement plants who are currently operating on an ad hoc

current competitive offerings, we feel that there is an

of the Virunga Gorilla. The other key competitive advantage

etc.), ii) develop a unique marketing model with the Virunga

key industry players efforts of using brand ideals. Their