Rabah Guessoum, CEO, Algerian Industrial Cement Group (Groupe Industriel des Ciments d’Algérie, GICA): Interview

Interview: Rabah Guessoum

What are the ambitions of GICA in terms of growing its production capacity over the coming years?

RABAH GUESSOUM: Total production today exceeds 12.5m tonnes of cement per year, which represents 55% of the Algerian market. To meet the growing demand, an ambitious development programme is under way to strengthen production capacities and diversify the product range for cement. With an investment of AD243bn (€2bn), the programme should allow GICA to reach production levels of 20m tonnes by 2020. The plan aims to build two new cement factories in the towns of Bechar and Sigus, in the wilaya (province) of Oum El Bouaghi with production capacities of 1m tonnes and 2m tonnes respectively, while extending production capacities of three cement plants in Oued Sly of the Chlef wilaya, Ain El Kebira, in Sétif wilaya, and Zahana in Mascara – all of which will add 4.5m tonnes per year to the national production.

Another part of the strategy is to diversify product offerings. In the segment of cement by-products, the development plan aims to achieve 7m tonnes per year of granulates and cracked sand, against 4.4m tonnes today, and 3.8m cu metres of ready-mix cement, against 2.8m cu metres currently. In addition, maintenance units will be modernised, a cement and concrete technological cluster will be created and cooperation between universities, research centres and production units will be enhanced. We also aim to rationalise energy consumption. This important development plan should reduce the price of cement on the Algerian market. We can already see the effects of an increased offer, as prices have been decreasing significantly in the last six months. This basic trend should remain going into 2018.

How do you see the cement market evolving?

GUESSOUM: As a public operator with the mission to satisfy constant growing national demand, we notice a clear trend towards diversification. Segments as diverse as construction and public or hydraulic works are all evolving as consumers’ demands increase. Cement for the oil and gas sector in particular demonstrates interesting potential, although it requires detailed research and development efforts. The Algerian market is becoming more competitive with private operators now starting to produce; therefore, the focus on client satisfaction has become crucial. The government aims to pursue its investments in infrastructure and housing, which means local demand for cement will keep growing in the years to come. The sector has also seen the arrival of multiple private cement producers, which should help revitalise the market. As a national producer, our aim is to remain a major player that can cover government project needs, while also meeting the demands of private investors. As a public operator, we also act as a market regulator, and the responsibility of the group is to maintain its pricing range by mastering its costs and avoid placing buyers at a disadvantage.

To what extent is Algeria in a position to export some of its cement production?

GUESSOUM: Discussions with foreign operators to export Algerian cement production abroad have started already, although satisfying 100% of domestic demand remains the priority. In parallel, inspection visits are being carried out at ports to check their cement exportation capacities. Some production units, located near maritime infrastructure, are more likely to export their production. Targeted markets for export operations include Libya, Syria and West African countries.

To enhance these export potentials, logistics facilities for cement handling and vessel loading have been strengthened. There are ongoing discussions with the Ministry of Transport to obtain port concessions to stock cement and clinker, and install the necessary equipment. The cargo rail network will also connect cement factories directly with ports, which will greatly speed up and enhance the cement transport capacity. This will allow us to facilitate exports in the near future.