Bamburi Cement is being fiercely fought over

Holcim's divestments in East Africa are resulting in a scramble to win shareholder approval for a successful bid to acquire its Kenyan subsidiary Bamburi Cement. Amsons Group and Savannah Clinker are in a head-to-head battle to secure the Kenyan operations and increase its foothold in East African cement production. Holcim has a 58.6 per cent majority shareholding in Bamburi Cement so they, and the other shareholders, will have to consider both bids to decide the plant's future.

Amsons Group made a bid of KES23.5bn (US$182m) in July 2024, through its Kenyan subsidiary and investment vehicle, Amsons Industries (K) Ltd, to acquire up to 100 per cent of the shares in Bamburi for KES65 per share. 

However, Amsons Group is not alone in its attempt to acquire Bamburi Cement. Just four days after Amsons Group offered its binding bid for Bamburi Cement, on 22 October 2024, Savannah Clinker countered with an offer to buy out the company's shareholders for KES76.55/share (US$0.59), upping its own initial bid of KES70/share in August 2024 by 9.4 per cent, to make a revised bid of KES25.41bn (US$197.2m).

Savannah Clinker (Savannah Cement Group) is also developing a plant in Kitui County, Kenya, which will extract limestone and produce up to 2.64Mta of clinker. It has promised to keep Bamburi Cement listed on the Nairobi bourse if it clinches the deal. Savannah Clinker is proposing to complete the buyout by 28 February 2025, while Amsons Group has proposed to close the deal by 28 November 2025. Currently, Savannah Clinker's bid is the more lucrative offer, approximately KES10/share higher than Amsons Group's bid.

Amsons bold expansion strategy

Amsons Group may not have given up the fight for Bamburi Cement. Amsons Group, the Tanzanian business conglomerate, is not only trying to land the Bamburi Cement operations, it has announced plans to enhance its East African market capacity with two new production expansion projects in Tanzania. Alongside its binding bid for Bamburi Cement, on 22 October 2024, Amsons Group announced plans for a US$320m integrated clinker and cement manufacturing plant in Tanga, Tanzania, with a cement production capacity of 5000tpd. Adding to its regional play, Amsons also plans to upgrade the recently acquired Mbeya Cement from Holcim, in Tanzania, with a new 1.5Mta grinding mill. 

Amsons Group Managing Director, Mr Edha Nahdi, said the firm is firmly focussed on its regional market expansion strategies. These strategies are underpinned by a proposed greenfield cement manufacturing setup in Tanga, expansion of the existing Mbeya Cement Factory, and the offer for the acquisition of Bamburi Cement in Kenya to complement its existing enterprises, including its Dar-es-salaam-based Camel Cement plant. "We have great plans to deepen our investment in Kenya and in Bamburi," said Amsons Group Managing Director, Edha Nahdi. 

Moreover, if successful in its Bamburi Cement acquisition, Mr Nahdi said the firm plans to invest a further US$400m in a medium-term commitment in foreign direct investments (FDI) to modernise Bamburi Cement's grinding and clinkerisation plants. In its binding offer issued on 22 October 2024, Amsons announced potential plans to develop a clinker plant at Matuga, Kwale County, to secure raw material self-sufficiency and reduce production costs for Bamburi Cement. This investment will enhance Kenya's competitiveness in the regional construction industry.

Amsons Group may yet have a trump card in being open about its desire to protect the local workforce at Bamburi Cement. "Thanks to the support of the Tanzanian and Kenyan governments, our regional expansion plans are now firmly on course. We plan to be one of the largest cement manufacturers in Kenya and Tanzania by 2030," said Mr Nahdi. In its offer document to Bamburi shareholders, the Tanzanian conglomerate also affirmed its dedication to preserving and developing Bamburi's workforce and nurturing local talent.

According to the shareholders circular issued by Bamburi Cement Directors, Amson's acquisition offer opened for acceptance at 9.00am EAT on 25 October 2024 and will run until 5.00pm EAT on 5 December 2024.

Amsons Group owns Mbeya Cement (1.1Mta cement capacity) and Camel Cement (cement capacity 0.85Mta) in Tanzania. Savannah Clinker Ltd is an affiliate of Savannah Cement that owns a 2.4Mta grinding plant in Athi River, Kenya.