John Chongo CEO of Ndola Lime Company “Export market is just waiting to be tapped”

As the mining sector and the economy in general expands, the demand for lime is set to grow with it. John Chongo, Chief Executive Officer of Ndola Lime Company, Zambia’s largest lime producer, anticipates a rise in demand of between 20 and 30 percent from the new mines coming on line.

“At Kansanshi they have already started taking some hydrated lime. That market is going to grow as soon as operations increase. It will also grow when Lumwana comes on stream and at Mopani, where they are increasing the smelter capacity, they will be requiring perhaps 50 percent more lime rock than in the past.”

At the same time there is demand for the company’s high quality lime from other African countries, including Zimbabwe, South Africa, Burundi, Tanzania, Mozambique, Malawi and the Democratic Republic of Congo. “The export market is just waiting to be tapped,” says Mr Chongo.

Around 4,000 people depend on the company for their livelihood. Last year its turnover reached $16.5 million (£9.1 million).

Mr Chongo believes it could do better. Ndola Lime currently produces an average of about 150, 000 tons of lime per year but it has the potential to produce much more. The mine has installed capacity to produce 1,000 tons of quicklime per day, with an estimated lifespan of another 100 years.

Mr Chongo pinpoints the 30 percent excise duty the company pays on heavy fuel oils as a major factor acting as a drag on its profitability. The tax pushes up the company’s costs and prices, reducing its competitiveness.

“Our profitability depends on the price that we pay for fuel. We would like a situation where the tax regime is reduced, so that we can lower our prices and capture more markets. We are profitable at the moment, but if the government were to relax the 30 percent duty we would become extremely profitable.”

A $1.3 million (£719,000) loan from Barclays Bank Zambia has paid for new machinery, and improvements have been made to increase efficiency, improve staff training, and eliminate waste.

The government, which has total ownership of Ndola Lime through Zambia Consolidated Copper Mines Investment Holdings (ZCCM-IH), is in the process of finding a buyer for 30 percent of the company. The Zambia Privatisation Agency (ZPA) has declared Athi River of Kenya its preferred bidder. A 15 per cent stake is expected to be held by Ndola Lime’s employees, the government will retain a holding through ZCCM-IH.

Mr Chongo is looking foward to the arrival of a new equity partner. He says it will end the uncertainty that has inhibited investment and lead to an improvement in the company’s performance. “We should be able to benchmark ourselves against the best in the business,” he says.