Bedeschi linked to construction of new MSG Group cement plant in Somaliland

Written by Global Cement staff 24 June 2022


Somaliland: Italy-based Bedeschi is preparing to help build a new US$60m cement plant for MSG Group. It has agreed with subsidiary Horn Holding Group to work on the new 1.2Mt/yr plant, according to the Il Sole 24 Ore newspaper. The current construction schedule will see the unit operational by mid-2025. Bedeschi typically supplies bulk handling systems to the cement sector. In 2019 MSG Group and Oman-based Raysut Cement agreed to build a cement grinding plant in the country. Raysut Cement was to own a 55% stake in the project and MSG Group the remainder.

Msg Group and Bedeschi Spa Italia have signed an agreement for the construction of a cement factory in Berbera, Somaliland. This can be learned from a press release from the Bergs & More legal, tax and financial consultancy firm, which assisted the two companies in the development of the agreement, acting as the originator of the project which it then followed during both technical and financial negotiations. Msg Group signed the deal through its subsidiary Horn Holding Group ltd (Hhg) based in Dubai.

From the note we learn that the cement factory will initially have an annual production capacity of 700,000 tons of cement and that, when fully operational, it will produce 1,200,000 tons of cement and 1,000,000 tons of klinker. The project, whose total value is approximately 60 million dollars, has obtained funding from leading Italian and international financial institutions. It will take three years to complete and bring the plant up to speed.

Somaliland, which is currently an importing country of cement, will thus be able to count on local production destined to satisfy domestic needs as well as that of neighboring markets.

The project will also result in job opportunities for the local population both during the construction phase and during its management. The direct impact on employment is estimated at 300 people; another 200 will benefit indirectly, it is specified in the note. The proximity to the port of Berbera will be essential for the export of cement.

With a population of around 6 million, an area of ​​around 177,000 square kilometers and a strategic location in the Horn of Africa, off the coast of the Arabian Peninsula, Somaliland needs to accelerate its growth in terms of infrastructure and of planned urban development. “The construction of a cement factory is therefore a strategic operation that will bring benefits to the country”, said Ahmed Said, Director of HHG during his
recent visit to the Bedeschi headquarters in Padua. “Furthermore, the agreement can pave the way for further forms of collaboration and brings a leading Italian company in its sector into a new, unprecedented, complex and, at the same time, concretely unexplored market” added Rita Ricciardi, partner of Bergs. & Blackberries.

Founded in 1908, Bedeschi SpA is today one of the oldest European companies specializing in the creation of turnkey solutions for cement factories, handling of bulk materials, container and brick logistics.

Horn Holding Group Ltd, founded and with offices in Dubai, Djibouti and a branch in Somaliland, is led by Mohamed Said Guedi (president and founder of the Msg group). The group specializes in telecommunications, fiber optic cable and Internet service provision, manufacturing, oil and gas exploration, construction, power generation and distribution, logistics, shipping, transit services and property and property management.

Bergs & More, a law, tax and business advisory firm, operates worldwide thanks to the founding partners Eugenio Bettella, Riccardo Giacomin, Rita Ricciardi, Guido Maria Solari in the offices of Milan, Padua, Doha, Dubai, Nairobi. It has a consolidated presence in Europe, the Middle East and Africa. [VGM]

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This is one of the top 10 things that Somaliland needs as a priority. The others include an Oil Refinery which will address the energy issue that we have. Also will greatly reduce the cost of building roads as Asphalt is a waste product of the refinery process of crude oil.

Also top on the list is Fish Processing plant for ready to eat canned tuna and Salmon. I think this is being developed by Dahabshiil?

Its located east of Mansoor Berbera hotel and should be opened soon. But we need some sort of zoning, building a tuna factory next to prime land suitable for hotel and leisure seems counter intuitive.

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This is a major government failure. Zoning should be the most priority in any blue print for a city.

There is swathes of land owned by the local government/central government. These lands are sold for personal gains. When instead it should have been used for zoning purposes and rented (long lease) to industrial investors - so they do not have to worry about cash-follow dilemma which is the number #1 killer of entrepreneurship. Or even implement schemes like “rent to buy” where the purchase of the land is payed out over a longer term as part of the rental fee.

UAE-based MSG Group and Italian firm Bedeschi SPA Italia will partner to build a cement plant through its subsidiary Horn Holding Group (HHG), which is based in DIFC Dubai. The plant will initially have a production capacity of 700,000 tons of cement and, when fully operational, will produce 1.2 million tons of cement and 1 million tons of klinker. The project is supported by Bergs & More, a leading legal, tax and financial advisory firm with a presence in Europe, the Middle East and Africa.

MSG Group investments and local benefits

With a total value of USD 60 million, financing for the project has been sourced from “leading Italian and international financial intuitions” according to a statement by MSG Group. The project will take three years to complete by which time the plant will reach full production. The project will employ approximately 300 people, with another 200 benefiting indirectly. MSG Group also highlighted the fact that it will develop the local infrastructure and that the plant will offer indirect benefits to the local wholesale and retail sectors. The proximity of the Berbera port will be crucial for cement exports and supplies. MSG Group’s Chairman Mr. Mohamed Said Guedi expressed great confidence in the success of the project, as the economic benefits will accrue not only to the MSG Group but also to the Government of Somaliland and its citizens, he claimed.

MSG group has previously developed large, complex projects in the territory including a 1,800-km fiber optic land cable within Somaliland connecting Djibouti, Ethiopia and Somalia, which was expanded in 2022 through two submarine cables in Berbera.

“We have started the first site visits these days, and the delivery of the functioning plant for phase 1 is expected in 18 months”, said Bedeschi SPA’s managing director, Mr. Rino Bedeschi. “It will be as modern a plant as possible also from the point of view of environmental impact and consumption, and extremely flexible in terms of the possibility of producing different types of cement for the different needs of the local market, with the goal to bring the last refining phase of the cement production process close to the consumer”.

Demand for materials

Somaliland is currently an importer of cement and the new project will help the country rely on local production, thereby reducing costs. The new plant will allow Somaliland to meet its own domestic need and to export to local markets. Development and urbanization is currently driving demand for a wide range of building materials.

The country has a population of approximately 6 million and covers 177,000 square kilometers of land in a strategic location on the Horn of Africa, opposite the Arabian Peninsula. Speaking of the need for Somaliland to accelerate its urban development and infrastructure, Ahmed Said, Director of HHG, said, “Therefore, the construction of a cement plant is a strategic deal that will benefit the country.” Rita Ricciardi, partner at Bergs & More, added, “The agreement can speed up further forms of collaboration and brings an Italian leading company to a new, unprecedented, complex and, at the same time, concretely unexplored market.”

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