Devki Group to boost clinker exports
National Cement (Devki Group) has announced that it will export up to 80 per cent of the clinker it produces when its new West Pokot plant in Kenya starts production. This will see increased clinker supply to the neighbouring countries of Uganda, Rwanda and Burundi.
Uganda's market is starved of clinker production with a capacity of just 1.86Mta, far below its nominal cement capacity of 7.13Mta, according to The Global Cement Report Plant Database (GCR PD). Rwanda's market is similarly deficient of clinker supply, with a total production of 0.48Mta, while its cement production reaches 1.2Mta. Burundi does not manufacture clinker and has just one grinding plant with a cement capacity of 0.1Mta, according to the GCR PD.
The signing of the supply deals for clinker with neighbouring countries will see the export of approximately 6000tpd of clinker to Devki's clients across the border. The greater export potential for Devki Group will arise when the delayed West Pokot plant begin operations in August 2023. The plant will have a clinker capacity of 3.5Mta and expects to export around 2.5Mta. Simba and National Cement (Devki Group) are now the largest clinker producers in east Africa, with a production capacity of 7.5Mta of cement.
“Currently we are exporting 20 per cent of our production to these countries but we are now signing long-term contracts that will see us supply clinker worth US$200m (KES27.7bn) a year,” said Devki Group Chairman, Narendra Raval.
Controlling clinker imports
Devki's growing clinker export trade is seen as a further move to control clinker supply in the region. Most Kenyan cement producers have to import clinker for cement production as local limestone is of insufficient quality and blended cements are popular in Kenya's market to differentiate products. It is thought that National Cement and Mombassa Cement have continued to import clinker for these reasons despite having clinker production faclities in Kenya.
After Devki Group set about lobbying the Kenyan government to raise clinker import taxes by 10-25 per cent, an investigation by the National Independent Clinker Verification Comittee concluded that locally produced clinker was 30 per cent cheaper than imported clinker from Egypt and Tanzania. Therefore, the Finance Bill 2023 has proposed a 10 per cent duty on clinker imports in an effort to promote locally-produced clinker. Mr Raval said, in May 2023, "This [tax] will reduce imports and save the country foreign exchange spent on buying clinker from external markets."
However, the opposing Kenyan brands of Rai Cement, Bamburi Cement, Savannah Cement, Ndvou Cement and cement traders Riftcot Ltd have argued that they have been given a grace period of four years lapsing in 2026 to build their own grinding plants in Kenya. This could see local players each invest US$1bn in domestic clinker production at their plant sites.
Devki Group expansion
Meanwhile, in May 2023, Devki Group also announced that it plans a KES45m (US$0.32m) Cemtech Ltd grinding plant in Eldoret, Kenya. The production will be based on pozzolana limestone cement with clinker being imported from the group's Lukenya (Machakos) and Salgaa (Nakuru) cement plants in Kenya.
The Devki Group owns Simba Cement, which is a subsidiary of National Cement. Cemtech Ltd was acquired by Simba Cement in March 2022 following approval form the Competition Authority of Kenya.
