International Financial Corporation injects Sh6.1bn into cement firm

What you need to know:

  • The investment will see National Cement’s production increase fivefold to 1.7 million tonnes per year.
  • The first phase of the expansion will see the firm benefit from new production equipment.

National Cement, a member of the Devki Group of Companies, has embarked on a Sh6.1 billion expansion plan across East Africa.

The International Financial Corporation (IFC), a private sector lending arm of the World Bank, approved the loan on Wednesday. Groundwork for the growth plan is ongoing, and the expansion will be in two phases set to be complete in 2016.

The investment will see the firm’s production increase fivefold to 1.7 million tonnes per year; intensifying the battle for control of the regional cement market that was stirred by the entry of National Cement and rival, Mombasa Cement.

Devki Group chairman Narendra Raval said the partnership with IFC combines experience from expertise in international infrastructure and environment management with knowledge from Kenya’s building industry to provide the best to customers.

STRONG SIGNAL

“As National Cement expands, we aim to contribute to improving infrastructure and housing in Kenya and beyond,” he said.

IFC director for Eastern and Southern Africa Oumar Seydi noted: “Kenya imports cement at high costs; we are sending a strong signal of our confidence in a Kenyan company making a difference in the local economy.”

National Cement has its headquarters in Athi River. The company produces two million tonnes of dry cement each year.

The first phase of the expansion will see the firm benefit from new production equipment, which will increase output to 1.7 million tonnes per year from the current 350,000 tonnes.

The second growth phase will see the firm set up a clinker manufacturing plant in Kajiado County. Clinker is a key ingredient in the making of cement. The firm has acquired 2,200 acres in Kajiado to set up the plant.

The local cement industry has grown with the entry of more companies and expansion of production capacity to supply ready markets in real estate as well as meet the demand from massive infrastructure projects in the region.

Other companies set to expand their business locally include Indian conglomerate, Cemtech in Pokot and Athi River Mining in Kitui County.