Savannah Cement company is set to start production in the second quarter of this year, its chairman Benson Ndeta announced yesterday. The cement plant, that cost a consortium of Chinese and local investors Sh8 billion to set up, will face competition from established companies such as Bamburi, East African Portland Cement, Athi River Mining, National Cement and Mombasa Cement. Ndeta said ultra-modern equipment are on the site at Athi Riverr. The roller press miller will help the company save of electricity cost.
Kenya produces 3.5 million tonnes of cement against a demand of 3 million per year. Some of the cement is exported to Somalia, Southern Sudan and Tanzania within the east African region. Bamburi Cement is currently the leading east Africa's producer of the product with an annual capacity of 2.5 million tons for export and local consumption.
The new plant that was initially to be built at Kitengela town in Kajiado County was rejected by residents after it emerged that it never complied with the standards set by the National Environmental Management Authority (NEMA). It relocated to a 50 acre land owned by the Export Processing Zone Authority (EPZA) at the base of Kitengela town but in Mavoko municipality in Machakos County.
Ndeta, the chairman at Savannah Cement and formerly chairman of the government-controlled EAPCC, said his firm is keen on satisfying supply shortfalls since demand for cement is projected to overtake the installed supply within the next two years. "A cement plant is a very capital intensive investment that would take as much as three years to mplete, which means that the installed will fall below demand in the next two years," said Ndeta, adding that the growth of the construction industry poromises sustained demand.
He said yea-on-year growth of cement in the region is projected to exceed 14 per cent which the installed capacity cannot match. The chairman said 30 per cent of the company's production will be sold in the countries outside East Africa. Savannah Cement plans to invest an additional Ksh 15 billion which is equivalent to U$150 million in a clinker plant in the second phase, expected to fall within the next two years and dependent on the market.
Ndeta said the firm will head-hunt a chief executive to head the operation of the new company rather than advertise, because the firm has "has an idea of whom it wants". During a press tour of the plant yesterday, Ndeta said the company has already started recruitment of staff at the lower cadre and that at the end of it all, some 3,000 workers will have been employed.
He said the company will introduce a regional scholarship program as its part of Corporate Social Responsibility, the company will also supply clean water to the residents of Athi River and Kitengela as soon as operations are in place. The company will also promote sports in the country as part of CSR. On environmental maters, the company says it has put in place de-dusters (machines that will recycle dust from cement and repackage into saleable products) to save the environment from being polluted.
Savannah Cement is a joint venture bringing together Savannah Heights, a consortium of local investors, Wan-Ho - a Chinese investment firm and Catic Cement sharing the stake at 40 per cent, 40 and 20 per cent respectfully. The entry of Mombasa Cement and Simba Cement over the last three years, with a joint installed capacity of 1.4 million metric tonnes has raised competition in the cement market, where Lafarge-owned and EAPCC have maintained dominance while Athi River Mining (ARM) completes the list of top three.
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