The Simba Cement manufacturer has signed a Sh6.2 billion loan deal with the International Finance Corporation (IFC), the private sector lending arm of the World Bank, to partly finance the ambitious expansion plans.
“We want to expand our production and increase our presence both locally and in the region. We have identified the main areas which we can invest in,” Devki chairman Narendra Raval said after signing the deal on Wednesday.
The proposed expansion, which will be in two phases set to be complete by 2016, will see National Cement’s production increase fivefold to 1.7 million tonnes a year – further intensifying battle for control of the local cement market that was stirred by entry of new players in the sector.
The first phase will see the Athi River-based plant add new production equipment that will increase the factory’s output to 1.7 million tonnes a year from the current 0.35 mtpa.
The second phase will involve construction of a new factory in Kajiado County, which will manufacture clinker – a key ingredient in the making of cement.
The cement maker could save between 20 and 25 per cent in production costs by making its own clinker while ensuring reliable supply of the raw material.
“Kenya often imports cement at high costs and this investment will increase the supply of locally produced cement and provide building blocks for East Africa’s infrastructure,” said Oumar Seydi, IFC director for Eastern and Southern Africa.
The firm is also planning to diversify its sources of revenue by manufacturing construction blocks and ready-to-construct concrete mix.
Cement manufacturers in the country are rushing to raise their production capacity in effort to cash in on the region’s booming construction industry.