Indian company to invest $80 million in Pokot cement plant

One of the world’s leading cement producers, Sanghi Group of India, is set to invest over $80 million in its cement plant in Kenya.

This follows the government’s move late last year to grant the group’s subsidiary, Cemtech Sanghi, rights to mine limestone in West Pokot — a few kilometres from the Kenya-Uganda border.

The new development comes at a time another Indian group, Mehta group, has been contesting limestone deposits in the area.

Correspondence between the government and Cemtech Sanghi — obtained exclusively by The EastAfrican — indicate that the Indian firm was granted “all the necessary permissions and licences by the concerned departments of the government of Kenya.” Mining is expected to begin before May 2012.

According to its business plan, the group will take between 30 and 36 months to build the proposed cement factory. Already, power and water connections have been completed at the mining site.

“Since 2007, our teams of experts based in India, Kenya, Tanzania, Canada and Dubai have been carrying out studies, including geological evaluation. They have also been exchanging correspondence with the country council of West Pokot and the government. We have so far spent more than Ksh280 million ($3.5 million) in the studies,” said Rajesh Rawal, the group’s managing director in charge of Africa Investment.

Mr Rawal said construction of an “ultra modern” cement plant in West Pokot is at an advanced stage. It is set to kick off in August at a groundbreaking ceremony to be presided by President Mwai Kibaki.

He said machines and equipment to be used at the plant are currently being designed in India and will be ferried to the country in one month.

Analysts say the entry of Cemtech in East Africa will stiffen competition in the cement sector, especially now that the spectre of cheap imports from Egypt looms large.

Mr Rawal says the company will segment its customers in such a way that even low income earners will be able to purchase its products.

The company will also venture in real estate. This could raise the living standards of the Pokot community that has been racked by poverty and cattle rustling for ages.

Sanghi cement of India manages one of the world’s largest single stream cement plants — producing over 20 million tonnes annually. “The group has a 150MW power station and a jetty. The latter docks 40,000-tonne cargo liners,” Mr Rawal said.

In what could drastically reduce cattle rustling in West Pokot, Mr Rawal says residents will be given priority in employment.

Initially, the company expects to employ more than 1,700 people. Under its corporate responsibility package, Cemtech will set up social facilities for residents and offer education sponsorships.

The managing director says the proposed plant will look at various grades of lime, marble stone production and “investigate the possibility of exploring for more limestone, volcanic ash and gypsum deposits” in the surrounding areas.