Groupe Rawji, whose history dates back to 1908, is a major player in the growth of the Democratic Republic of Congo (DRC). An international conglomerate involved in trading, banking, manufacturing, real estate, electrical and IT services, and oil and gas, it has operations spanning eight countries and is now actively seeking to boost its presence in the GCC, Africa and Middle East.

Its flagship companies include Beltexco, a leader in the distribution of fast moving consumer goods (FMCGs); RAWBANK, a leading bank in the DRC; Prodimpex, a specialist in the distribution of technical equipment for transport and engineering; and Marsavco, the country’s largest manufacturer of food and personal care products, from soap and detergents, to edible oils, margarine and cosmetics.

It also is a provider of electrical and IT services through Proton, and is active in property management and real estate through Parkland and Rafi.

In addition, the group also trades in FMCGs and materials and equipment for the mining, cement, steel, and construction industries through Hexagon Imund Export of Germany which it owns, and whose subsidiaries include Importex (based in Germany), Hexagon International Commodity Traders (South Africa) and Straina (Uganda). 

CEMENTING TIES

The Rawji group’s newest manufacturing venture – a $270-million cement plant called CIMKO – launched production late last year. Located in Bacongo, some 240 km west of the capital Kinshasa, the plant was the fruit of a joint venture with Pakistan’s Lucky Cement and has a capacity of 1.2 million tonnes a year. 

CIMKO Managing Director Riadh Ben Khalifa believes the new plant will have a positive impact on the economy of the DRC.

Riadh Ben Khalifa hopes the new plant will have a positive impact on the economy of the DRC

“Our target market is large construction companies and government projects and we expect these will form a significant part of our capacity utilisation in future,” he says.

CIMKO currently produces two types of cement: CEM II 32.5 and CEM II 42.5. The former is used primarily for construction of homes while the latter is used for projects that require high-strength cement. In terms of packaging, it offers both bagged and bulk cement.

CIMKO will have a positive impact not only on the construction industry but also the economy as it is a huge industrial venture, says Ben Khalifa.

“In the past, the supply of cement was inconsistent and projects used to get delayed. Now, customers can get cement within a day of placing their order instead of waiting for weeks and months. Further, our quality meets international standards and customers are also assured that it’s fresh and has not become unusable, a fear normally associated with imported cement, given its short shelf life,” he adds.

The Rawji group and Lucky Cement put up the equity while the debt funding was provided by a consortium of financial institutions including International Finance Corporation (IFC), the African Development Bank (AfDB) and EKF.

“The primary challenge was the financing. However, the lenders believed in the strength of the sponsors and this gave them the confidence to invest in our project,” he says. “Another problem that we faced was the delay in the first consignment of construction materials which was stuck at a transshipment port for several months. Subsequently the management changed its strategy, enabling us to complete the project ahead of time.”

CIMKO’s plant and equipment was supplied by FL Smidth of Denmark, one of the largest manufacturers of cement plants in the world. “Their team supervised the erection and commissioning of the plant while construction was carried out by a group of contractors with extensive experience in Asia. We also had other European contractors working on the electrical installations. Together, we completed the construction of the plant ahead of schedule, which is remarkable.”

Ben Khalifa is reasonably optimistic that CIMKO will, in the long run, help bring down the DRC’s cement prices which are among the highest in the world.

“There are two main reasons for high cement prices: high taxes and duty, and the DRC’s undeveloped infrastructure which results in high transportation and distribution costs,” he says, pointing out that prices are unlikely to fall immediately. “However, we expect that with the improvement of port and infrastructure facilities, costs will come down. We are also in discussions with the government to reduce the tax burden on the industry and we expect a downward pressure on prices in the long term.” 

Mustafa Rawji: expansion is driven by market knowledge and strong roots

While CIMKO does not aim to become an exporter in the near future, it will ramp up capacity based on demand, he adds.

With the Rawjis active in real estate through its two firms Parkland and Rafi – the latter of which also operates a port – Mustafa also sees this sector as another area of promise especially in the GCC and the African continent, as the middle class continues to grow.

GCC FOCUS

Meanwhile, Groupe Rawji is also keen to boost its presence in the UAE and the rest of the GCC, says Mustafa Rawji.

“Over the last decade, we’ve strengthened our assets and operations and now have a mature portfolio,” says Mustafa, a fourth-generation Rawji who works alongside his family on the corporate Board.

The fourth generation consists of nine active members with the mission to further growth the conglomerate.

“We will expand horizontally, by growing our existing businesses, as well as vertically, by integrating and merging with other firms,” he says. “Our expansion will be driven by our market knowledge, strong roots, and an international interest in the Middle East and Africa.”

Mustafa points out that the Rawjis will set up strong links in Dubai, which remains an unrivalled logistical hub that seamlessly connects Asia, Middle East, and Africa.

“We are setting up our corporate presence here to promote our existing businesses, as well as to remain abreast of new opportunities” adding that presence will help bring them closer to international players who are present in the region and who are looking to participate in the foreseeable growth in the African continent over the next decades

“Dubai has emerged as the economic crossroad linking CIS countries, Asia and Africa - quite simply a region that holds two-thirds of the global population,” he adds.

He continues: “The UAE is a very attractive energy market in terms of contacts, potential partners and sub-operators and more importantly, can be leveraged through the African continent, where global growth will be concentrated in the next two to three decades. Additionally, the UAE is vibrant in terms of development and allows us to maintain focus on GCC and African opportunities.

“In the long term, we aim to consolidate our presence in the Middle East, Africa and Asia through the acquisition of industrial assets as well as setting up of green-field projects. This would be part of our horizontal growth and would involve integrating our existing knowledge and experience domestically and internationally,” he concludes.