Coal plant construction set to boost demand for cement

Executives of Amu Power Company, a consortium planning to build a coal-fired plant in Lamu, have said they will build a 210-metre concrete stacking tube, opening a huge market for cement and steel.

BY NEVILLE OTUKI

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Executives of Amu Power Company, a consortium planning to build a coal-fired plant in Lamu, have said they will build a 210-metre concrete stacking tube, opening a huge market for cement and steel.

The stack, expected to be the tallest structure in East Africa, is meant to discharge smoke at safe heights to prevent harm to the environment.
The project also involves the construction of cooling towers and a 10km road network to open up the site.

“We will need huge amounts of cement, steel and ballast in the construction of the plant,” said Amu CEO Francis Njogu adding that they would be placing orders soon.

Construction of the Sh182.7 billion ($2 billion) coal plant will take 21 months and produce 981.5 megawatts of electricity.

Mr Njogu said that the firm will set up social amenities, including schools and health facilities, to meet its corporate social responsibility. The plant will be located on 870 acres of land and connected to the Indian Ocean by a jetty.

The project is set to boost local cement firms, coming at a time when most have cut prices on falling energy costs.

The construction of a 10,000km road network is expected to consume 300,000 tonnes of cement upon completion in 2017, around which time the standard gauge railway will be completed and is expected to take up 700,000 tonnes.

READ: Cement firms bank on lucrative public projects to drive sale

A lot of cement will also be needed for construction of the Lamu Port Southern Sudan-Ethiopia Transport corridor thereby boosting consumption.

This comes at a time when private investors have also ratcheted up property development due to higher returns.

Cement firms have been producing above the market’s absorption capacity with statistics showing that production stood at 5.2 million tonnes by end of last November against consumption of 4.5 million tonnes in the 11-month period.

Standard Investment Bank, in its latest report on the sector, forecasts cement production to rise to 6.3 million tonnes this year and 6.7 million tonnes next year in response to increased construction projects.

There are six cement manufacturers in Kenya, namely Bamburi, Athi River Mining, East Africa Portland Cement, Savannah Cement, National Cement and Mombasa Cement.

Two other potential entrants are Sanghi and Dangote Cement, with Dangote seen as a big threat to local players.

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