Savannah Cement has revived plans to build a clinker factory as a rival pushes for increase in import levies to force local sourcing of the raw material.
Savannah Cement said in regulatory filings that it had acquired a mineral-rich land in Kitui where it plans to invest in a factory that will extract and grind and process clinker, a key raw material for cement making.
If allowed by the National Environment Management Authority (Nema), it will become the next cement firm to build its own clinker plant after Bamburi #ticker:BAMB, East African Portland Cement Company #ticker:EAPC, National Cement and Mombasa Cement.
Last February, National Cement chairman Narendra Raval proposed an increase of import duty on clinker from 10 to 25 percent to support consumption of locally-sourced clinker.
Mr Raval said his firm had a production capacity of 7.5 million tonnes per annum against a demand of four million tonnes.
“An increase in duty will protect local industries from competition, create more jobs for Kenyans and save Kenya over Sh10 billion annually spent on importation of two million tonnes of clinker,” he said.
However, the other cement manufacturers cried foul, arguing that the businessman would enjoy a monopoly that would lead to an increase in clinker prices, helping National Cement to sell products at lower prices than rivals.
“Savannah Clinker Ltd is proposing a project which will entail extraction of raw materials and construction of a clinker plant. The mining process will involve raw material extraction, grinding, proportioning and blending, pre-heater phase, kiln phase, cooling and final grinding and packing and dispatch,” it says.