Whale Rock Cement intends to acquire Schwenk Namibia, which controls a majority stake in Ohorongo Cement, in a move that could centralize cement production in Namibia. The acquisition is currently filed with the Namibian Competition Commission, and public feedback is being requested to assess competition impacts.
Whale Rock Cement, the parent company of Cheetah Cement, has initiated the process to acquire Schwenk Namibia, which owns a majority share in Ohorongo Cement. The filing was made to the Namibian Competition Commission (NCC) on February 17. If the acquisition proceeds, Whale Rock Cement will have total control over cement manufacturing in Namibia.
The acquisition involves Whale Rock Cement purchasing the entire issued share capital of Schwenk Namibia from SCHWENK Zement International GmbH & Co. KG. At present, Schwenk Namibia possesses a 69.83% interest in Ohorongo Cement, while Industrial Corporation South Africa, the Development Bank of Namibia, and the Development Bank of Southern Africa own the remaining shares.
Ohorongo Cement, established in 2007 by the Schwenk Group, commenced its production operations in December 2010. The company manufactures cement under the Ohorongo brand and is proactive in sourcing alternative energy. Its subsidiary, Energy for Future (Pty) Ltd, addresses scrub encroachment on farms by converting biomass into energy for the cement plant.
Whale Rock Cement recently expressed its confidence in Namibia’s regulatory framework, stating, “The fact that we decided to open our factory in Namibia is a demonstration of the confidence we have in the country and its regulatory framework. We believe Namibia stands heads above many African countries as far as offering an environment conducive for investment.” Whale Rock inaugurated its factory near Otjiwarongo in April 2018.
This attempt to acquire Ohorongo Cement is not unprecedented for Asian companies. In 2019, International Cement Group Limited sought a N$1.5 billion acquisition of Ohorongo Cement, which ultimately fell through. A proposed merger in 2020 between Schwenk Namibia and West China Cement was also blocked due to competition concerns. Further, a proposed 2024 merger with RWCo GmbH was abandoned due to stringent local ownership conditions.
The NCC has invited public commentary on the acquisition to safeguard fair competitive practices. Stakeholders who wish to voice concerns can submit feedback via the NCC website. The NCC advised to “Provide a brief description of your concern, and include any relevant details or documentation. Your submission will be reviewed confidentially, and we’ll follow up if further information is needed.”
Whale Rock Cement’s intention to acquire Schwenk Namibia could significantly impact the Namibian cement market by consolidating production under its control. This acquisition reflects the firm’s confidence in the regulatory environment of Namibia. However, historical attempts by various entities to acquire Ohorongo Cement highlight the challenges faced in such mergers. Stakeholder feedback is now sought by the NCC to ensure fair competition in this potential transaction.
Original Source: www.observer24.com.na
