Windhoek: Whale Rock Cement's attempt to acquire Schwenk Namibia, the producer of Cheetah Cement, is facing strong opposition from stakeholders who fear it could create a monopoly in the local cement industry. On Thursday, the Namibian Competition Commission (NaCC) held a stakeholder meeting to gather information about the proposed acquisition of the parent company of Ohorongo Cement.
According to Namibia Press Agency, NaCC Chief Executive Officer Vitalis Ndalikokule stated that on 17 February 2025, the commission received a merger notification regarding Whale Rock Cement's proposal to acquire 100 per cent of the issued share capital in Schwenk Namibia. The transaction entails acquiring ownership of Schwenk Namibia from its parent company, Schwenk Zement International GmbH and Co, a German cement conglomerate. The Chinese-owned Whale Rock Cement operates Namibia's second cement plant, located near Otjiwarongo, where it produces Cheetah Cement.
As a result, NaCC brought together stakeholders to discuss the proposal, during which various interest groups presented their submissions. In his submission, George Garab, the Otavi Constituency councillor representing the Otavi Cement Group, expressed his objection to the merger, particularly concerning the potential sale of Ohorongo to foreign investors. He indicated that the deal was structured without engaging local shareholders, financiers, or industry players, which contradicts national aspirations of economic empowerment and equitable ownership of key industries.
Garab expressed that even the Otavi Cement Group, which owns the license to the farm where the Ohorongo plant is located near Otavi, was not offered the opportunity to buy the shares. He stated that selling to Whale Rock Cement would establish an effective monopoly in the Namibian cement industry. Nick Korb, representing a business consortium including major clients for Ohorongo Cement, also objected to the merger, stating it will transform the Namibian cement market from a duopoly into a monopoly.
Schwenk Zement International GmbH and Co holds a 69.83 per cent stake in Ohorongo Cement through Schwenk Namibia, with other partners including the Industrial Corporation of South Africa, the Development Bank of Namibia, and the Development Bank of Southern Africa. Ohorongo Cement Managing Director, Hans-Wilhelm Schutte, noted that Schwenk has been attempting to sell its operations in Namibia for some time, aligning with its strategic intent to expand in Europe.
However, Schutte maintained that local cement manufacturing faces growth challenges, with an average market consumption of 600,000 tonnes per year against a surplus capacity of close to two million tonnes. This surplus, coupled with limited export markets due to import restrictions in neighboring countries, supports the notion that the Namibian market could be adequately served by a single cement plant, in this case, Cheetah Cement. He added that the transaction will not affect the current shareholding in Ohorongo Cement.
Meanwhile, Ndalikokule emphasized the potential threats posed by the horizontal merger between Cheetah Cement and Ohorongo Cement. He explained that such a merger could lead to unilateral effects where the merged entity might raise prices or reduce output due to its dominant market position. The meeting aimed to inform stakeholders about the merger and provide an opportunity to engage with the NaCC and the merging parties.
The competition commission took note of the concerns and proposed remedies in making its determination as provided for under Section 47.1 of the Competition Act of 2003.