Savannah Cement, Kenya, wants to raise KES39.7bn (US$350m) via a bond on the London Stock Exchange to build a clinker production plant.
The firm has been relying on imported clinker to meet cement demand. Savannah Cement Chief Executive Samson Shivina said that the firm expects the plant to be completed by mid-2024.
"This is entirely being financed by a bond on the London Stock Exchange because locally, we may not find banks who are going to finance such size of the project unless it is a syndicate," said Shivina. "The site works have already begun," he added.
Savannah Cement says the clinker plant will be based in Kitui and will have a capacity of 8000tpd or 2.7Mta. The company will also use the money to set up a grinding plant of 700,000tpa at the same place in Kitui to give it a competitive edge in serving northeastern parts of the country, South Sudan and Ethiopia.
Imports fall
Kenya imported 0.924Mt of clinker in the nine months to September 2021, down from 1.465Mt in a similar period in 2020, data from the Kenya National Bureau of Statistics (KNBS) shows.
The value of the imported clinker was KES5.6bn, compared with KES6.22bn spent in the preceding similar period in 2020.
Savannah’s planned clinker plant comes amid calls for the government to increase import duty on the commodity from 10 per cent to 25 per cent to encourage local consumption.
New expansion projects
National Cement is planning to increase its clinker capacity by 2Mta while Bamburi will expand its capacity by 1.6Mt. Others on an expansion drive are Rai Cement (1.3Mt), Karsani Ramji & Sons (1Mta) and Portland Cement (0.096Mt).
