SA chemical firm targets Kenyan plant in two years

A South African manufacturer of chemicals used in the construction industry has opened a Nairobi office to serve the region as it gears up to set up a factory in 2016.

Chryso Southern Africa Group said the Nairobi subsidiary is meant to make the company more efficient in serving the East African countries where it already has a presence.

Chryso is owned by private equity firm LBO France and operates in 20 countries across Europe, North America and emerging markets. Emerging markets account for over 50 per cent of its business.

“Servicing customer needs is our primary driver and the establishment of Chryso Eastern Africa further underlines our strategy to further expand our footprint in Africa,” said Chryso Eastern Africa country manager Trevor Sawyer.

Chryso primarily produces concrete and cement additives. The company will open a manufacturing plant in 2016 but the management did not give details of the planned size of investment or the location of the factory and its size.

Mr Sawyer said the decision to expand its operations is driven by the growing demand for its product in the region as a result of the massive infrastructure projects being rolled out.

“Kenya has shown impressive sales growth for the group over the past nine years, so it made good business sense to solidify our presence in the country. With logistic networks, warehousing facilities and clearing agents already established, Chryso Eastern Africa will now focus on building a manufacturing plant in the next year.”

Chryso is owned by private equity firm LBO France.

State-funded infrastructure projects in rail, roads, ports and sewer plants are giving foreign and local companies the impetus to expand capacity and introduce new products.

Savannah Cement recently introduced Hydraulic Road Binder (HRB), a product to be used in stabilisation of soils in road construction projects.

“Working in collaboration with the Kenya Roads Board, among other partners, the development of a Savannah HRB product, will ultimately support the cost effective development of local roads which are an economic enabler,” said Savannah Cement managing director Ronald Ndegwa.

Demand for materials used in road construction is expected to go up with the start of the plan to pave 10,000 kilometres of road through the annuity programme.

The cement plant is also investing $100 million (Sh10 billion) to increase capacity to meet this demand. Data from the Kenya National Bureau of Statistics (KNBS) shows the construction industry registered the fastest growth rate in the first quarter of this year with at 11.3 per cent growth rate.

Construction of the Standard Gauge Railway, port expansion and various power plants that are coming up is also expected to increase the demand for cement and related products.

Real estate analysts however say the increase in lending rates is expected to slow down construction of houses in the mid and lower end of the markets.