A man carries a bag of cement from a Nairobi outlet. Karsan Ramji & Sons’ planned plant will produce 700 tonnes of cement per day. PHOTO | FILE
What you need to know:
Karsan Ramji & Sons, which opened factory in Athi River in June, seeks approval to set up another near Nakuru.
A Kitengela-based quarry operator is stepping up his investments in the cement business with the planned construction of a Sh428 million plant in Nakuru, the second such project in the past one year.
Karsan Ramji & Sons has sought regulatory approval to set up a cement factory in Engashura area, seven kilometres from Nakuru town. The factory will have an average daily production capacity of 700 tonnes.
Karsan Ramji & Sons recently completed construction of a similar-sized cement factory in Athi River and in June began selling cement under the brand name Ndovu to customers in Nairobi and its environs.
The company’s main line of business has been production of ballast at three quarry sites it owns in Kitengela, Kilifi and Nakuru.
“If we secure regulatory approvals in time, construction will begin in December and the factory will begin operating by November 2016,” Kishor Varsani, the firm’s managing director, said in a telephone interview.
“Financing of the new cement factory is being wholly provided by local banks whose identity I cannot reveal.”
Regulatory filings deposited at the National Environment Management Authority (Nema) indicate that the firm plans to install the new factory on a 1.5 hectares piece of land.
This is part of the 17.4 hectares the company owns along the Nakuru- Nyahururu highway, land on which one of its three quarries sits.
The plant will use imported clinker while pozzolana and gypsum will be sourced locally from its quarries. The three raw materials are ground and mixed to produce cement.
“The plant will input cement into the Kenyan market and have the effect of healthy competition in the sector, promising more competitive prices,” the firm says in its regulatory filings.
Karsan Ramji & Sons’ new facility will see them go up against established players such as Bamburi, East African Portland Cement Company (EAPCC) and ARM Cement who together control 77 per cent of Kenya’s cement market.
Nigerian tycoon Aliko Dangote plans to build a Sh40 billion cement plant in Kitui, while Indian conglomerate Sanghi Group plans to construct a Sh12 billion cement plant in West Pokot.
Kenya’s cement production last year stood at 5.88 million tonnes, having grown 16.4 per cent from the previous year’s 5.05 million tonnes as a result of new players entering the industry.
Cement production in the country has consistently outpaced consumption which stood at 4.26 million tonnes and 5.19 million tonnes in 2013 and 2014 respectively.
Oversupply of cement
“Everybody knows that there is currently an oversupply of cement in the Kenyan market,” said Mr Varsani.
“However, our decision to diversify our business into this sector is based on the belief that demand for cement will soon outpace supply. This is in line with the expected growth of the economy and construction industry.”
Karsan Ramji & Sons’ maiden Athi River plant is located about 500 meters from the factories of its two rivals; Mombasa Cement and Bamburi. Other competitors in the neighbourhood include Athi River Mining and East Africa Portland Cement.
The plant which recently started operations was initially to be installed in Kitengela but residents opposed the project citing health and environmental concerns, forcing the investor to relocate the venture to Athi River.
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