MSG Group invests USD 60 million to build cement plant in Somaliland

MSG Group and Bedeschi SPA Italia to create plant that will produce 1.2 million tons of cement and 1 million tons of klinker.

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.”

The MENA construction industry has continued to grow despite increasing price pressure.