Bamburi earns Sh1bn from cement supplies to rail contractor

Workers construct a bridge for the standard gauge railway in a section of Tsavo National Park. PHOTO | FILE 

By NEVILLE OTUKI, notuki@ke.nationmedia.com

In Summary

• Bamburi is among local firms contracted by a Chinese contractor to supply materials for the Sh327 billion project.
• Chinese contractor CRBC last July said that Kenyan firms had supplied it material and services worth Sh23.5 billion, with only machinery and locomotives not available locally being imported.

Bamburi Cement says it has earned Sh1 billion from supply of cement to the standard gauge railway (SGR) contractor, making it one of the biggest gainers from the ongoing construction of the Mombasa-Nairobi line.

The cement maker is among local firms contracted by a Chinese contractor to supply materials for the Sh327 billion project.

Bamburi said in an interview that it has supplied 300,000 tonnes of cement to the rail project since September 2014, earning it “over Sh1 billion.”

“The SGR contract has increased our production by 10 per cent to more than two million tonnes per year,” said the company’s commercial director Geoffrey Ndugwa.

Other local suppliers of cement to the China Road and Bridges Corporation (CRBC) include the East African Portland Cement, ARM Cement and Savannah Cement.

The project intended to connect the port city of Mombasa with a high-speed railway line to Nairobi, running onwards to Kampala, Burundi and Juba.

Chinese contractor CRBC said it has contracted 600 suppliers.

The firm last July said that Kenyan firms had supplied it material and services worth Sh23.5 billion, with only machinery and locomotives not available locally being imported.

The Bamburi director said that bulk transportation of cement had doubled.

The Nairobi Securities Exchange-listed firm estimates that it will supply 150,000 tonnes of cement to the project this year.

The construction of the railroad has expanded the market for suppliers, boosting their sales volumes.

CRBC is required to allocate contracts equivalent to 40 per cent of the works to Kenyan firms, in a government policy meant to lift earnings of local firms, transfer skills and ease unemployment.

READ: Standard gauge rail material supplies earn local firms Sh23.5bn

Foreign contractors undertaking public works are also required to allocate nearly half of the tenders to Kenyan investors.

Bamburi, a subsidiary of French conglomerate Lafarge, recorded 85.9 per cent growth in net profit for the half year ended last June at Sh3 billion, powered by increased sales.