Mauritius’ Seruji sells 60pc stake in Savannah Cement

Corporate News

Savannah Cement plant in Athi River. PHOTO | EVANS HABIL 

By BRIAN WASUNA, bwasuna@ke.nationmedia.com

In Summary

• Seruji held majority shares of Savannah Cement until December, which it had acquired after buying out Chinese firms Wan-Ho International Holding (40 per cent) and Acme Cement (20 per cent).
• The buyout comes ahead of a planned $250 million (Sh23 billion) clinker plant construction in Athi River by the manufacturer, which aims to reduce its operating costs by eliminating importation of the key raw material.

Savannah Heights, a shareholding company of cement maker Savannah Cement, has taken full control of the Athi River-based manufacturer after buying out Mauritian firm Seruji’s 60 per cent majority stake.

Seruji held majority shares of Savannah Cement until December, which it had acquired after buying out Chinese firms Wan-Ho International Holding (40 per cent) and Acme Cement (20 per cent).

Seruji is fully-owned by Savannah Cement chairman Benson Ndeta who is one of the company’s founders. This effectively now makes him the majority shareholder of the manufacturer.

In a statement released on Sunday, Seruji spokesman Alfred Ng’ang’a said: ‘‘Following the acquisition of the 60 per cent stake by Seruji Ltd, Savannah Cement now becomes Kenya’s first, wholly locally owned cement manufacturing firm. The firm will now be a 100 per cent owned by Seruji Limited and Savannah Heights, entities which are wholly owned by indigenous Kenyan entrepreneurs.’’

The buyout was completed in November last year. It comes ahead of a planned $250 million (Sh23 billion) clinker plant construction in Athi River by the manufacturer, which aims to reduce its operating costs by eliminating importation of the key raw material.

The Competition Authority of Kenya (CAK) on Friday published a notice giving its approval for the acquisition.

“It is notified for general information that the Competition Authority of Kenya has approved the proposed acquisition of 60 per cent of the shareholdings of Savannah Cement Limited of Seruji Limited,” the gazette notice reads.

Bamburi, East African Portland Cement, National Cement, Mombasa Cement and ARM Cement make the list of Kenya’s main cement producers.

Savannah’s new plant is also expected to help increase its production capacity which currently stands at 1.5 million tonnes annually.

Demand for cement has risen steeply over the past two years in tandem with a host of several multi-billion shilling projects in both the public and private sectors.

The Sh174 billion Lamu coal power plant and the Sh300 billion standard gauge railway are among the projects that have pushed up demand for the key construction material.

Cement consumption grew by nearly a fifth to hit a record five million tonnes last year, driven mainly by robust growth in property development.

Fierce competition and a drop in the cost of energy have seen cost of the commodity drop to about Sh575 per 50kg bag, from more than Sh600.

Firms have been producing more cement than the market can absorb, with statistics showing that production stood at 5.7 million tonnes last year, up from 5.05 million tonnes the previous year.

Standard Investment Bank, in its latest report on the sector, says production will rise to 6.3 million tonnes this year and 6.7 million tonnes next year.