Cement billionaire bets on new factories to grow fortunes

Devki Group chairman Narendra Raval.
Devki Group chairman Narendra Raval.
Kenyan construction material billionaire Narendra Raval, popularly known as Guru, is setting up two cement factories in the country as he seeks to boost sales by lowering prices of the commodity.

The first plant, which has the capacity to produce 750 million tonnes of cement annually, will be located on a 20-hectare plot in Mariakani, Kilifi County, while a second plant of an equal capacity will be located in the Rongai township of Njoro sub-county in Nakuru.

Each of the two plants will be built at a cost of Sh3 billion.

According to Mr Raval, the two cement plants will help to further lower the price of cement, while shortening the distances covered by lorries delivering the material to construction sites across the country.

“When we launched our operations six years ago, our goal was to reduce the cost of housing and it is being realised as I have managed to offer quality cement at Sh550 ex-factory compared to the then market price of Sh700 per 50-kilogramme bag before our entry,” Mr Raval said.

Devki, which produces the popular Simba cement brand, owns a cement grinding plant in Lukenya, Machakos County and a clinkering plant at Simba town, Kajiado.

The company also owns steelmaking factories in Athi River, Machakos and Ruiru town in Kiambu County.

The proposed Njoro plant, according to regulatory filings will be located on the Nakuru-Eldoret highway in Rongai town and it will serve customers within Nakuru, Baringo, Narok and Uasin Gishu counties and Western Kenya.

It will provide employment to 900 people during construction and on completion will have a capacity to produce an estimated 750,000 tonnes of cement annually.

READ: Kenya cement prices drop to 15-year low, could fall further

Devki’s Njoro plant is the second proposed cement factory in Nakuru after Kitengela-based quarry operator Karsan Ramji and Sons – manufacturers of Ndovu Cement – announced plans to establish a plant at Engashura near Nakuru town with a capacity to produce 224,000 metric tonnes annually.

Mr Raval’s big bet on the local cement market comes in the wake of intensified battle for customers, which has kept cement prices flat at Sh630 to Sh700 per 50-kilogramme bag for the past decade.

Local manufacturers are also contending with the influx of cheap cement that is quickly eating into their markets.

Despite the challenges, manufacturers are optimistic of better days ahead and are investing billions of shil-lings in additional capacity.

Savannah Cement, for example, is expanding its Athi River plant to double its capacity from 1.2 million to 2.4 million metric tonnes by 2019. Bamburi and ARM are also upgrading their plants to add 900,000 and 650,000 metric tonnes a year.