Savannah Cement plans to raise $350 million (KSh39.7 billion) via a bond on the London Stock Exchange (LSE) to build a clinker production plant.
The firm has been relying on imported clinker – a component that makes up about 70 per cent of cement. It now wants to change this by building its plant.
Savannah Cement Chief Executive Samson Shivina said the firm projects the plant to be completed by mid-2024.
Savannah Cement to make the big announcement at end of this month
“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.
He disclosed that the announcement is supposed to come by the end of January 2022. The site works have already begun.
Savannah, which started operations in July 2012, says the clinker plant will be based in Kitui and will have a capacity of 8,000 tonnes per day or 2.7 million tonnes annually.
Savannah will also use the money to set up a grinding plant of 700,000 tonnes per annum at the same place in Kitui to give it a competitive edge in serving North Eastern, South Sudan and Ethiopia.
The project will occupy 1,000 acres of land and will include infrastructures such as hospitals, schools, markets and a police station.
Local cement manufacturers have had to deal with supply disruptions when importing clinker, forcing many of them to set up their own clinker plants.
Data from Kenya National Bureau of Statistics(KNBS) shows that Kenya imported 0.924 million tonnes of clinker in the nine months to September 2021, down from 1.465 million tonnes in a similar period in 2020.
The value of the imported clinker was KSh5.6 billion, compared with KSh6.22 billion spent in 2020.
The Savannah Cement investment, which stands at an estimated value of KSh 10 billion, is indigenously owned by Kenyan investors and has a cement grinding plant capacity of 2.4 million tonnes a year.
The plant is strategically placed near Nairobi, which accounts for 50% of Kenya’s cement consumption.
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