Simba Cement to build new Sh19bn plant

Corporate News

Mr Narendra Raval, the CEO National Cement. Photo/FILE 

By SIMON CIURI

In Summary

• The cement maker on Wednesday signed a Sh6.2 billion ($70 million) loan from the International Finance Corporation (IFC) to partly finance its expansion plans.
• IFC, which is the World Bank’s private lending arm, will get a seat on National Cement board as part of the loan deal.
• The proposed investment will see National Cement undergo a two-phase expansion expected to be completed by 2016.

The maker of Simba Cement brand, National Cement, is set to build a Sh19.4 billion ($220 million) production plant in Lukenya on Mombasa Road, which will be partly financed by a loan advance by IFC.

 

The cement maker on Wednesday signed a Sh6.2 billion ($70 million) loan from the International Finance Corporation (IFC) to partly finance its expansion plans.

IFC, which is the World Bank’s private lending arm, will get a seat on National Cement board as part of the loan deal.

“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,” said Narendra Raval, the National Cement Company founder and chief executive after signing of the loan deal.

He said the new plant will start by producing one million tonnes of cement per annum and then expanding to 1.7 million tonnes. The expansion plans will also be funded through drawing from the cement maker’s internal cash reserves.

Mr Raval said the company is eyeing diversification that will include making of construction blocks and ready-to-construct concrete mix.

“We are pursuing innovation in line with growing our brands,’’ said Mr Raval.

The proposed investment will see National Cement undergo a two-phase expansion expected to be completed by 2016.

The first part will see the Athi River-based plant add new production equipment that will increase the factory’s output to 1.7 million tonnes per annum (mtpa) from the current 0.35 mtpa.

READ: National Cement secures Sh6.4bn for Kajiado plant

The second expansion phase will see National Cement set up a plant in Kajiado County that will manufacture clinker, a key ingredient in the making of cement.

“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 during the signing.

Kenya’s cement industry has been growing with the entry of more companies and expansion of production capacity to supply ready markets in real estate and the massive infrastructure projects underway across the region.

Indian conglomerate Cemtech and Athi River Mining also plan to set up a new cement plants in Pokot and Kitui respectively.

Dangote Cement, owned by Nigerian billionaire Aliko Dangote, has also announced it is making a (Sh34.6 billion) investment in a plant that will produce 1.8 mtpa.