Kitengela quarry owner in Sh428m plan for mini cement factory

A Kitengela-based quarry operator has revealed plans to build a Sh428 million mini cement plant in Athi River, adding competition pressures in an industry whose prices have remained flat for about a decade.

Karsan Ramji & Sons says it will begin construction of a small-scale cement grinding plant with a production capacity of 700 tonnes per day by the end of the year.

The privately-owned company joins the cement business at a time when Kenya’s cement production has surpassed local consumption, sparking market share wars which have held prices at between Sh630 and Sh700 per 50-kilogramme bag.

“We are waiting for all the approvals before we can kick off,” said Kishon Varsani, managing director of Karsan Ramji & Sons Ltd.

The cement plant will import clinker while sourcing locally for pozzolana and gypsum from its quarries in Kajiado and Kilifi to mix and grind the raw materials to produce cement.

It will be 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.

The company said it is awaiting regulatory approvals from the National Environment Management Authority (Nema) and the Machakos county government to begin construction works.

The grinding plant will be imported at a cost of Sh350 million while the factory will produce ordinary cement to be sold in 50 kilogramme bags and in bulk targeting large clients.

Indian conglomerate Sanghi also intends to set up a Sh12 billion factory in West Pokot with an annual capacity of one million tonnes.

Kenya’s cement production grew 7.8 per cent to 5.05 million tonnes in 2013, beating total consumption which stood at 4.26 million tonnes last year— forcing cement makers to aggressively pursue regional export markets on the back of cut-throat competition in the local market.

Karsan’s cement plant was previously to be set up in Kitengela, where the firm owns a quarry, but residents opposed the project citing health and environmental concerns, forcing the proponents to relocate the project to Athi River.

“The plant is also smaller in size compared to the existing ones owned by project site neighbours and is technologically superior in terms of militating against cement dust and noise levels,” the company says in its filings to Nema.

Karsan Ramji & Sons Cement borders Mombasa Cement’s factory and there are three other rival factories located in the neighbourhood, including Bamburi, Athi River Mining and the East Africa Portland Cement.

The privately owned company said it was turning to cement grinding to cash in on the booming construction market and help cut reliance on income from quarrying.