Workers prepare building materials at the Taru Ballast quarry in Kwale County for the construction of the standard gauge railway. Mega projects have increased demand for cement. PHOTO | FILE
What you need to know:
The cement grinding plant will be built on a 50-acre property located in Kaplelach Village, about 30 kilometres from Kericho town.
The factory has the capacity of producing 730,000 tonnes annually.
It will be the first cement grinding plant in the western Kenya region as the others are located in Machakos or at the Coast.
A cement factory with the capacity of producing 730,000 tonnes annually will be set up in Kericho heightening competition in the industry and further stabilising prices.
Rai Cement plans to build a multi-billion cement grinding plant on a 50-acre property located in Kaplelach Village which is about 30 kilometres from Kericho town.
It will be the first cement grinding plant in the western Kenya region as the others are located in Machakos or at the Coast.
“The plant will have the capacity to produce 2,000 tonnes of cement per day using raw materials such as clinker, additives, gypsum and pozzolona. With the exception of clinker that will be imported into the country, all the other in-puts will be mined locally,” said the company in its fillings to National Environment Management Authority (Nema).
The Business Daily was not able to establish if was linked to the wealthy Rai family.
Increased consumption of cement in Kenya and neighbouring countries driven by heavy infrastructure projects has attracted international players such as Nigerian billionaire Aliko Dangote and Indian conglomerate Sanghi-Cemtech.
Mr Dangote, Africa’s richest man, says he intends to set up a factory with a capacity of three million tonnes in Kitui at more than Sh35 billion. Cemtech plans to construct a Sh10 billion plant in Pokot with a capacity of 1.2 million tonnes per year.
The older cement companies have also been injecting capital to expand operations in a bid to protect and grow their market share even with the new entrants.
Currently, Kenya has six cement producers with Bamburi Cement enjoying the largest market share.
Savannah expects to spend Sh18 billion to set up a second plant in Athi River while National Cement, Lukenya-based maker of the Simba brand, are set to invest Sh19.4 billion in a production plant in Kajiado county.
Athi River Mining has announced plans to invest an estimated Sh27 billion ($300 million) to grow its capacity.
Some of the projects consuming huge volumes of cement include construction of the standard gauge railway, the Lamu Port South Sudan-Ethiopia Transport corridor, Terminal Four at Jomo Kenyatta International Airport in Nairobi, and the booming property market, especially retail malls.
However, some contractors of the huge projects have been accused of favouring imported cement over Kenyan commodity even as manufacturers claim there is no difference in quality. Imports are largely from the Pakistan and Chinese markets.
Data from the Kenya National Bureau of Statistics shows the six companies produced 5.8 million tonnes of cement last year up from five million tonnes the previous year.
The local market consumed 5.2 million tonnes of cement last year compared to 4.2 million tonnes in 2013 underlining the growing demand.
Surplus cement is exported to neighbouring countries which are also experiencing similar economic growth as Kenya.
The government has also moved to cash in from the growing sector with introduction of a Sh140 levy per tonne of cement which translates to Sh7 per 50-kilogramme bag.
Increased production has also resulted in price war that has seen the price of a 50-kilogramme bag drop to between Sh650 and Sh700.
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