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REVIEW OF THE BUSINESS IN 2016 it to be delivered directly to customers in Ghana. In 2017 we will import much more cement from Nigeria, which is a fellow member of ECOWAS and therefore such imports will enjoy significant duty benefits when compared to imports from the Far East. In addition, we are planning to build a 1.5Mta clinker grinding facility so that we can import clinker to manufacture cement within Ghana itself. In January 2017 we were honoured by the Ghana Revenue Authority for being the largest taxpayer in the Tema region where our import and bagging facility is located. The factory employs more than 300 people directly and we expect to create hundreds more jobs in operations and logistics when the new grinding plant opens at Takoradi. Senegal Senegal has higher than average urbanisation when compared to other African countries, at 43%, as well as a strong commitment to infrastructure investment focused on roads, railways and a new airport. Inflation is low, even negative, and as with other countries whose currency is the CFA, the currency is relatively stable against the Euro. Our factory in Pout opened in December 2014 and quickly established itself as a formidable new entrant into a market dominated by two well-entrenched incumbents. By the end of 2016 we were the number two producer, selling slightly more than 1.0Mt of cement in a market of 4.0Mt, which is a market share of 25%. We achieved this rapid success by selling superior 42.5-grade cement at a price competitive with other manufacturers’ 32.5-grade products. Since then, other producers have upgraded to 42.5-grade and cut the price of their 32.5-grade products in response. We increased sales volumes by nearly 9% in 2016, despite a 10-day stoppage for unscheduled maintenance in March. In April 2016, we achieved a successful handover of the Operation & Maintenance (O&M) contract of plant from the contractor, Sinoma and now run O&M ourselves. 60 Annual Report 2016 The health of the mining industry will be a key factor in Sierra Leone’s recovery and the World Bank estimates GDP growth could expand to nearly 7% in 2017 if activity in the mining sector recovers. Per-capita consumption of cement is relatively low at less than 60kg, with urbanisation at just 40%. We estimate the market for cement to have been 0.3Mt in 2016, somewhat ahead of the 0.2Mt sold the year before. Given the country’s low consumption at present, our import facility is more than capable of satisfying demand for the entire country. We hope eventually to satisfy this demand by supplying cement produced in Senegal or Nigeria which, like Senegal, are members of the ECOWAS duty-free trading zone. South Africa South Africa’s economy remained muted in 2016, with GDP growth of just 0.4%, according to World Bank estimates published in January 2017. Inflation was nearly 7% at the end of 2016, according to Trading Economics. The South African government is increasing its commitment to infrastructure investment and in December 2016, confirmed plans to spend up to ZAR 987.4B ($72B) over three-year period from 2017, with a focus on energy, transport and telecommunications. Cement pricing was relatively stable during 2016, averaging $76 across the year. In 2017 we expect to increase sales even further, serving export markets in Mali and other neighbouring countries. Sierra Leone Our 0.7Mt import and bagging plant in Sierra Leone received its first shipment of bulk cement and began selling to customers in January 2017 and therefore made no contribution to the business in 2016. The country has no native limestone and is therefore reliant upon imports of bulk cement. Now that the country is free of Ebola we anticipate that activity will pick up as the economy recovers. Having fallen to -21% in 2015, the World Bank expects Sierra Leone’s GDP growth to have been approximately 3.9% in 2016.

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