Cimenterie de Lukala – Cementing Achievement
For a long time Cimenterie de Lukala CILU was the name in cement in the DRC. But as more names enter the market this company is rising to the challenge.
Cimenterie de Lukala is known widely in Africa as CILU, and for a long time it was a by-word for Cement, the same way “Kleenex” has come to mean “any tissue” or “Hoover” means “vacuum cleaner”.
“Our number one selling point is our name, our brand in the market,” says Andreas Bischofberger, Managing Director of Cimenterie de Lukala. “We used to be the only brand on the market. It used to be you weren’t buying cement, you were buying CILU. It was one name, one brand. It set us apart in many areas and even today the demand for our cement in this country is unique. We are very well known.”
This year is a special year for that brand, as the company celebrates 100 years since it began operations in 1921. The company has a number of events planned to mark the anniversary, including an official press conference marking the 100 years, and a special celebration with its customers.
“In April we will do a cocktail evening here in Kinshasa with members of the group and local authorities, then we will be celebrating at the plant with our workers and the provincial authorities,” Bischofberger says. “That will be a big party.”
Today the company employs roughly 250 direct and indirect workers, with 122 of those being employees at the company’s plant in Lukala.
“We have strong ties across the business, with the various parts of the company organised into clusters,” Bischofberger explains. “We’re in Cluster III here in Africa, with our Cluster management based in Tanzania, the Congo, Mozambique and South Africa.”
A lot can change in 100 years, and in the last few years, the market has become more competitive. 2017 saw two new competitors enter the local cement market, and while they have begun to carve out their own niche, CILU still dominates in brand recognition.
“It is a very well-known brand, and since we have the new plant, we’ve been able to increase our quality,” Bischofberger says. “We have excellent quality in the market, far higher than local standards and anything else in the market. This has brought us back some market share and brand recognition.”
However, when we talk with Bischofberger it’s clear that it’s not local competition that he is most concerned about.
“While local competition has grown and is a healthy part of the market, we’ve also faced illegal imports which have hampered the outlook for our company and the sector at large,” he says. But we’ve been defending our market well.”
As well as stopping illegal, low-quality imports from getting dumped into the market, Cimenterie de Lukala must also address the challenge of getting its own products to every part of the country that needs it.
“We aim to reach every city in the country with our cement. However infrastructure can mean it’s really a challenge,” Bischofberger admits. “We have started to deliver cement to more remote areas, and with some regions that we estimated it would take six weeks to reach, it’s actually taken six months. Depending the area we have to load and unload the cement 12 times between trucks, barges, rail, back on barges again and then back on trucks. It’s really complicated. So, logistics is a very difficult challenge here and expensive as well.”
Overcoming that challenge has been an ambitious process of optimisation throughout the logistics side of the business.
“If we want something in four to six weeks, it can sometimes take much more time, but overall we’ve been optimising the delivery schedule and reducing prices,” Bischofberger says. “We’ve been working with two independent rail companies and a whole range of different barges, especially during the dry season. They can still arrive in certain areas even if the water level is low.”
The company is also working to bring in new blood while taking care of its already existing long-term staff.
“The labour law here protects the workers very well, meaning you can’t cancel a contract as an employer, so whoever you hire is basically for a lifetime,” Bischofberger points out. “There are limited work opportunities in Lukala, so staff retention is high. This is nice because you do not get turnover but it also means bringing new and fresh blood into the organisation can be difficult. We have started to address that. Two years ago we began doing internships with young engineers. We got ten interns on board, and three of them we went on to hire. We have now launched a new internship programme and hopefully, we will be able to hire a few of these young ones in different capacities.”
As well as providing much-needed jobs to an area that urgently needs them, Cimenterie de Lukala also supports local communities in other ways. Last year the company launched a number of initiatives, such as their staff volunteering to go out and clear up roads and living areas.
“We launched another initiative in October where we included the community and other local companies and politician, about 700 individuals participating in a clean-up of all the plastic garbage in Lukala,” Bischofberger says proudly. “We have renovated a farm that was abandoned, we have initiated fish farming and reforestation of the area to provide a sustainable income for our neighbours.”
The cement firm is also working on biofuel solutions, asking villagers to bring in palm nuts that can be used in the burning process, providing local people with additional income and work while allowing the company to substitute its coal consumption.
At its heart, Cimenterie le Lukala is still focused on growth and believes the country has potential for a much bigger cement industry than it already has.
“We are currently barely operating at 35% capacity. We have way more capacity available, as does our competition, so there is a lot of room for the market to grow,” Bischofberger tells us. “We estimate an installed capacity here of 3.2 million tons and consumption nationwide is around 1.2 million tons, so there is capacity readily available that we can activate overnight.”
There is a huge construction vacuum in DRC being its infrastructure, commercial industry and private housing projects.
“Just to give you an idea, the cement consumption per capita here in the Democratic Republic of Congo is 15 kilos, while in neighbouring countries it is 85 kilos,” Bischofberger explains. “That’s a lot of potential for development, and this is where I see the company moving into, providing a quality product for the future for developing this emerging and beautiful country.”