Whale Rock Cement Proposes Acquisition of Schwenk Namibia to Control Cement Production

Whale Rock Cement intends to acquire Schwenk Namibia, which holds a majority stake in Ohorongo Cement. This transaction, submitted to the Namibian Competition Commission, could grant Whale Rock complete control over cement production in Namibia. The NCC has opened the floor for public feedback regarding this acquisition.

Whale Rock Cement, the parent company of Cheetah Cement, has filed a notice to acquire Schwenk Namibia, which possesses a majority stake in Ohorongo Cement. This notice was submitted to the Namibian Competition Commission (NCC) on February 17. If the NCC approves the acquisition, Whale Rock Cement will gain total control over cement production in Namibia by purchasing the entire issued share capital of Schwenk Namibia from SCHWENK Zement International GmbH & Co. KG.

Currently, Schwenk Namibia holds a 69.83% stake in Ohorongo Cement. The remaining shares are held by Industrial Corporation South Africa (14.27%), Development Bank of Namibia (11.73%), and Development Bank of Southern Africa (4.17%). Ohorongo Cement, founded in 2007 by the Schwenk Group, commenced production in December 2010 and not only manufactures cement under its brand but also seeks alternative energy sources for its operations.

Ohorongo Cement, through its subsidiary Energy for Future (Pty) Ltd, has initiatives to reduce scrub encroachment on farms and convert biomass into energy for its cement production. In a recent statement, Whale Rock Cement expressed confidence in Namibia’s regulatory environment. The company remarked, “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 Cement inaugurated its factory near Otjiwarongo in April 2018. This acquisition attempt is not unprecedented; in 2019, Singapore-listed International Cement Group Limited sought to purchase Ohorongo Cement with a N$1.5 billion offer, which ultimately fell through. Additionally, a merger proposal between Schwenk Namibia and West China Cement in 2020 was blocked due to potential collusion issues.

While a merger between Schwenk and RWCo GmbH was approved in 2024 under conditions to enhance local ownership of Ohorongo Cement, this transaction was also abandoned due to burdensome requirements. The NCC has invited public input regarding the proposed acquisition to ensure competitive fairness. Stakeholders may submit concerns via the NCC website, with submissions handled confidentially.

In summary, Whale Rock Cement’s proposed acquisition of Schwenk Namibia would significantly consolidate cement production in Namibia. This move follows previous attempts by foreign entities to acquire Ohorongo Cement, reflecting the challenges of foreign investments in this sector. The involvement of the Namibian Competition Commission serves to safeguard market competition, allowing public feedback on the transaction to ensure transparency and adherence to regulatory standards.

Original Source: www.observer24.com.na