Savannah Clinker has received funding amounting to Sh65 billion ($500 million) for construction of a new clinker factory as the race for control of the crucial cement-making raw material heats up.
Savannah Clinker, an affiliate of Savannah Cement, said it raised the funds through a privately placed debt arrangement with the bond set to be listed at regulated international exchange.
Savannah is one of the cement manufacturers, which have no clinker plant and has been forced to import this raw material.
“I am extremely proud to have the support of a major international investor who shares our vision and beliefs in what is required to deliver the growth and development of our key infrastructure and affordable housing,” said Benson Ndeta, chairman of Savannah Cement Group.
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Savannah will build its clinker plant in Kitui county, as demand for cement surges due to a construction boom that has been boosted by an national affordable housing programme.
Cement producers have been sharply divided over a proposal by some of the players to increase import duty on clinker in order to support local production and create jobs.
Billionaire Narendra Raval, through his company National Cement, has been pushing for enhanced import duty on clinker, the main ingredient for the manufacture of cement as the steel magnate eyes some Sh8.3 billion that factories without grinders pay to import the crucial raw material.
However, five cement makers, including Savannah, have pushed back saying they had already been given a grace period of four years lapsing in 2026 to build their own grinders.
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The other five players are expected to put up individual clinker investments worth $1 billion (Sh125 billion).
Such investments normally take about 22-36 months to be installed and commissioned.
They said locally-produced clinker is supposed to be significantly cheaper than imported one.