Chandaria Industries is set to build a Sh5 billion tissue paper manufacturing factory in Tatu Industrial Park expected to double its production capacity.
The firm has leased 29 acres of land at Tatu City, a residential and commercial real estate development, where it will set up the factory within the next four years.
Chandaria, which already has another factory that produces a range of tissue and hygiene products, expects the new facility will entrench its market dominance. The firm currently produces 1,200 tonnes of hygiene products every month.
“It (factory) will be in addition to our existing manufacturing facility and headquarters in Ruaraka,” group chief executive Darshan Chandaria said Thursday during the signing of the lease with Tatu City.
“The new facility will be built on 29 acres and will employ at least 1,000 people. We will increase our tissue paper manufacturing capacity by at least double our existing capacity.”
Tatu City is an upcoming 2,500-acre, mixed-use development with residential, commercial and industrial amenities near Ruiru. The development is majority owned by American firm Rendeavour.
Chandaria Industries which produces brands such as Velvex, Nice & Soft, Toilex, Rosy and Dawn Pekee will join a host of companies that are moving their operations to Tatu Industrial Park or are opening additional production facilities.
Among the firms that have already leased land in the area are consumer goods maker Unilever which acquired 70 acres, tissue paper maker Kim-Fay East Africa and Maxam, the distributor of Heineken beer in Kenya.
Coffee maker Dormans and consumer goods manufacturer Bidco that acquired a 78 acres last year are both on the ground developing their facilities.
Stephen Jennings, Rendeavour chief executive said they had initially set aside 450 acres for the industrial park with only 140 of this remaining.
Mr Chandaria said the firm had conducted thorough due diligence before leasing the land from Tatu, adding that they believe the current court cases on the ownership of part of the land will not affect them.
Rendeavour has been involved in court battles with several individuals including former Central Bank of Kenya governor Nahashon Nyagah and billionaire businessman Vimal Shah over ownership of part of the Tatu City land.
“We are not worried about this because we carried out very thorough due diligence with one of Kenya’s top law firms. That due diligence was not just carried out in Kenya but other relevant jurisdictions as well,” Mr Chandaria said.
He added that they chose to set up in Tatu due to large scale infrastructure facilities including reliable power supply, good quality roads, water and sewer and drainage networks.
Mr Chandaria added the location also provides multiple access to main roads for raw materials and finished goods.
The Sh5 billion capital outlay will cover the cost of the land lease, construction of the factory and purchase of equipment.
Mr Chandaria was non-commital on when construction would begin saying they expect to be on site in the next two years, with the works set to take two years to complete.
Nick Langford, country head of Rendeavour, said they have laid out 20km water pipe, 15km of sewer pipes and one kilometre of underground cabling.