Displaying items by tag: Kenya
National Cement plans US$19m coal fired power plant
05 November 2014Kenya: National Cement is set to build a 15MW coal-fired power plant in Kajiado at a cost of US$19m as part of its expansion plan. The plant will feed its upcoming limestone mining and clinker manufacturing operation in the same location.
National Cement will transport the clinker to its plant in Lukenya, which is being expanded to 1.7Mt/yr capacity from the current 600,000t/yr. National Cement, which produces the Simba cement brand, said that it decided to generate its own electricity because of delays in connecting to the national grid, where power is also more expensive. "The cost of procuring electricity from Kenya Power is twice as much when compared with the cost of generating power using coal," said National Cement.
Electricity supplied from the national grid currently costs an average of US$0.18/kWh. Based on current international coal prices, power generated from coal costs US$0.15/kWh. Coal prices have dropped by 18% since the start of 2014 and a further fall could make energy derived from coal even cheaper. However, the Kenyan government has said that the cost of power form the national grid could halve in the medium term on expansion of the country's generation capacity to 5000MW from the current 1300MW.
Besides seeking lower costs, National Cement has said that it has been forced to construct the coal plant due to Kenya Power's delays in connecting its Kajiado operations. "Kenya Power is also unable to provide power to National Cement within the required time frame (within two years) and only install the electricity in three years' time, while electricity is needed for the clinker manufacture in 24 months' time."
National Cement states that it will import coal from countries like South Africa, but Kenya's move to start mining its own coal could see the firm source the commodity locally in the future. The coal consumption for the proposed power plant is estimated at 63,360t/yr. Saving on energy costs is expected to boost the firm's margins, underlining the importance of lower operational costs in an industry hit by vicious price wars.
EAPCC posted full-year net loss
27 October 2014Kenya: EAPCC has posted a net loss of US$4.32m for the year that ended on 30 June 2014. The company said that it had been hurt by price competition, high staff costs and the weakening Kenyan shilling. In the year that ended 30 June 2013, EAPCC posted a net profit of US$18.9m.
EAPCC said that it hopes to capitalise on the growing construction industry and plans to spend US$27.9m in the coming year on new investments. "The company has not been left behind and is aggressively investing in new machinery and equipment to increase efficiency and capacity," said EAPCC. However, it added that, "The market will continue to be highly competitive and is likely to see declining prices for the foreseeable future."
Savannah Cement focuses on East Africa
22 October 2014Kenya: Savannah Cement has confirmed on-going plans to include the East African market as part of its regional integration support project. The regional market development project is based on a commitment to pursue sales opportunities in all East African countries by 2015, according to managing director Ronald Ndegwa. He added that plans to appoint local dealers in Rwanda and Burundi are at an advanced stage.
Savannah Cement has good market performance in the Kenya, Uganda, Tanzania and South Sudan markets. In Tanzania it has expanded its market reach by retaining in-country dealers in Arusha and Mwanza to cover the country's inland cement demand.
"Savannah Cement's overall corporate development is anchored on a regional market coverage strategy and we are glad that we have made good inroads in the respective East African markets," Ndegwa said. "With our current installed production capacity of about 1.5Mt/yr, we are well placed to meet regional demand." The company is also considering doubling its current production capacity to meet demand.
Ndegwa disclosed that Savannah Cement is lining up development projects valued at more than US$300m, including an investment plan to establish a clinker manufacturing facility and to commission its second grinding plant.
Savannah Cement lines up new investments
13 October 2014Kenya: Savannah Cement, one of Kenya's newest market entrants, is set to build two new plants as it nears exhaustion of its current capacity, according to managing director Ronald Ndegwa. He said that Savannah Cement plans to invest US$250 – 350m for a clinker plant and a second mill to support its existing operations.
"We see ourselves running out of headroom in two to three years at our current mill, hence the new investment," said Ndegwa. "The clinker plant would use local limestone to make clinker."
Bamburi’s profit down by 28% in first half of 2014
08 August 2014Kenya: The profit of Lafarge-controlled Bamburi Cement slumped by 28% to US$26.2m in the first half of 2014, as the company outlined plans to profit from Kenya's ambitious infrastructure spending plans. It said that its profit took a hit due to the higher cost of both power and imported clinker. However, its revenue increased to US$197m from US$180m in the first half of 2013.
Bamburi is the biggest cement maker in east Africa's largest economy, where a construction boom driven by infrastructure projects and real estate has helped boost demand for cement. "We are optimistic that the business environment will progressively improve in the second half of the year," said the firm.
In June 2014 the Kenyan government raised US$2bn through a debut Eurobond and said most of the proceeds would be used to finance infrastructure projects. Bamburi said it expects Kenya's planned infrastructure projects, including roads, railways and a new Indian Ocean port in Lamu, to improve sales.
IFC allocates loan to National Cement Company
30 July 2014Kenya: National Cement Company has received a US$70.2m loan from the International Finance Corporation (IFC). The loan will be used to fund its cement production expansion programme. With the help of the loan, National Cement Company can bolster cement production five-fold to 1.7Mt/yr by 2016 at a cost of US$200m. National Cement Company's CEO Narendra Raval stated that the company aims to close the Kenya's 6Mt/yr cement production gap to stabilise cement prices.
Raval stated that the company's five-fold increase in cement production would see a significant reduction in cement prices in Kenya, where increasing prices have been driving up the cost of construction. However, the entrance of new cement companies in the local market has seen an increase in competition and a gradual reduction in the volume of imported cement.
Kenya: Strong sales of cement and fertiliser have boosted Kenya's ARM Cement's pre-tax profit by 20% to US$13.68m in the first half of 2014. Total revenue jumped by 16% to US$86.6m, after cement sales rose by 10% in Kenya and by more than 33% in Tanzania. The improved sales were attributed to an improved distribution network.
"The east African regional economies are growing briskly and demand for cement, as well as the other products, are expected to grow further," said ARM. The company expects earnings to grow further in the second half of 2014, mainly due to improving margins driven by investments in its plants in Tanzania and Kenya.
ARM has invested a total of US$171m in a clinker plant in Tanga, Tanzania and a cement plant in Dar es Salaam, also in Tanzania. The plants have a combined capacity of 1.8Mt/yr. The investments have helped the earnings before interest, taxes, depreciation and amortisation (EBITDA) to hold steady at 24% in the first half of 2014, defying pressure from higher input costs, such as energy.
Holcim assumes control of Bamburi Cement
11 July 2014Kenya: Holcim is set to acquire effective control of Kenya's Bamburi Cement Company Ltd as part of the planned merger between Holcim and Lafarge. Lafarge is Bamburi's parent company. Bamburi said that the proposed combination would not effect any changes to the ownership of Bamburi and that the local outfit would remain listed on the Nairobi Securities Exchange (NSE).
"The parties do not wish to see any change to the status of Bamburi as one of Kenya's leading industrial companies listed on the NSE," said Holcim. Holcim added that maintenance of the listing on the NSE and the wide-scale investment from the Kenyan public in Bamburi's shares is a key ingredient to the success of Bamburi.
Lafarge owns 58.6% of Bamburi's total issued share capital through two subsidiaries: Fincem Holding Ltd (29.3%) and Kencem Ltd (29.3%). Kenyan institutions and individuals own an estimated 32.17% of Bamburi shares. Currently Holcim does not own any shares directly or indirectly.
ARM Cement acquires Kigali Cement
03 July 2014Kenya: Kenya's ARM Cement has completed the acquisition of Rwanda's Kigali Cement as it continues expanding its East African market.
ARM, which has held a 35% stake in the only privately-owned cement company in Rwanda since 2011, Kigali Cement, bought out the remaining 65% stake held by various shareholders to take complete control of the firm. The deal was finalised in April 2014. Kigali Cement, which had US$1.9m in net assets in 2013, has a cement production capacity of 100,000t/yr, which is expected to increase with further ARM investments.
"We finally acquired a 100% equity stake and full control of our Rwanda grinding plant," said ARM's chairman, Rick Ashley. He added that ARM also plans to increase its capacity and market share using its flagship brand, Rhino Cement.
The value of the deal was not disclosed, but it is estimated to cost over US$1.2m based on Kigali Cement's net asset value. The purchase will be financed by banks, according to Pradeep Paunrana, ARM's chief executive.
The acquisition is part of ARM's expansion plans, which seeks to improve sales in Rwanda and neighbouring markets. ARM will leverage on its new acquisition to expand its production and distribution network in East Africa. Ashley said that ARM will seek further measures to increase its market presence in Kenya, East Africa's largest economy, as well as Rwanda and Tanzania, completing ongoing projects and focusing on new markets in the region.
ARM is expected to commission Tanzania's Tanga plant, which holds a production capacity of 1.2Mt/yr of cement, in the fourth quarter of 2014. It will also start construction of its US$300m Kitui plant in Kenya in October 2014.
Kenya/Uganda: Bamburi Cement intends to appoint Bruno Pescheux, the country CEO for Syria, as the CEO of Bamburi Kenya and Daniel Pettersson, the general manager of Hima Cement, as the CEO of Bamburi Uganda. At present the Lafarge subsidiary is run as one unit. The Kenyan business has three subsidiaries - Bamburi Cement, Bamburi Special Products and Lafarge Eco Systems while the Ugandan unit is managed as Hima Cement.
"With a view to improving focus on our markets it has been decided that, starting on 21 July 2014, the Kenya-Uganda cluster will be managed as two separate country organisations each with a country CEO and executive team," said outgoing Bamburi chief executive Hussein Mansi in a staff memo. Pescheux and Pettersson will report to Tom Farrell, group executive vice president.