Sanghi hires Chinese firm to set up cement factory

Sanghi Cemtech group has contracted a Chinese consortium to put up its cement plant at Pokot and up-scaled its intended investment in Kenya to $175 million (Sh13 billion).

The Chinese group made up of various engineering firms will also install a captive power plant at the Sanghi 650-acre site.

The Indian Sanghi group, which holds 80 per cent stake in the Kenyan subsidiary, owns the world’s largest single stream cement plant with capacity of over 20 million tonnes.

“The consortium will manufacture, install and commission the ultra modern, state of the art and environmentally friendly cement plant,” said managing director Rajesh Rawal in a statement.

Phase one of the cement project will put up capacity of 600,000 tonnes and is set for completion by end of 2011 or early 2012.

Phase II which brings total capacity to 1.2 million tonnes per annum will be completed by 2014/15.

The group earlier intended to invest $80 billion (Sh6 billion).

Its revised business plan however shows phase one will cost $86 million with the second phase costing $88 million, bringing the total to $175 million or Sh13 billion.

The firm after nearly four years of groundwork received all government and local authority permits.

They include the investment certificate by Kenya Investment Authority, environmental impact assessment licence by NEMA and 99 years of exclusive mining rights.

The group recently procured 650 acres of land at Pokot on which it will establish the cement plant, a school, staff houses, a medical centre, training centre, captive power plant and other amenities/facilities.

The project is expected to create over 1,500 direct and indirect jobs and benefit up to 10,000 people. 

The groundbreaking ceremony which will be presided over by top government will take place this month and invites have been sent out.

Mr Alok Sanghi, vice president Sanghi cement, and other senior managers will attend the ceremony.

On Tuesday, Mr Rawal asked the government to protect local cement companies from dumping of cheap cement.

He noted the cost of doing business in Africa, especially that of electricity, transport, furnace oil and establishment of the necessary infrastructure, was exorbitant.

Sanghi Cemtech is expected to join East African Cement Producers’ Association which has been campaigning against reported dumping particularly from Pakistan.