Cement manufacturer Savannah Limited has signed a Sh45billion (USD 300million) deal with Chinese company Sinoma International Engineering to construct a clinker and cement plant in Kitui county, a move that will make Savannah one of the three largest cement firms in East and Central Africa.
The deal was signed by directors of the two entities at the Savanna headquarters in Nairobi led by chairperson Benson Ndeta and their Chinese counterparts in Beijing.
Savannah has committed to complete its clinker manufacturing component in two years, and the cement aspect in a period of months.
“We are happy to firm up this contract to deliver the most modern and state-of-heart production factory for our operations in Kitui county. The plant will crush locally available limestone to clinker in addition to a 100-tonne per hour cement grinding plant. To ensure sustainability, and lower plant operation costs, the contractor will also build a power plant to run the entire complex. We have also committed sustainable manufacturing. Within the five years of initial clinker extraction, we will replace fossil fuel-based power requirement within five years of combination of solar power and thermal re-circulation, becoming the first plant in the region to achieve this,” Ndeta stated.
Ndeta said the project involves the building of the plant with a capacity to process 8,000 tonnes of clinker per day together with a 2,400 tonnes cement grinding plant, a 35 megawatt captive power plant, 13 MW waste-heat recovery system and associated infrastructure and amenities.
The development will drastically relieve the cement market the burden brought about by importation of clinker and considerably align itself to the government’s stated policy on industrialisation.
Savannah’s four main competitors, Bamburi, East African Portland Cement, Mombasa cement and National Cement have their own clinker plants and several of them are planning to expand capacities.
The country has an installed cement grinding capacity of 15 million which needs to be matched close to 10 million tonnes of clinker capacity but has a deficit of 3.5 million tonnes at the moment which are imported from Middle Eastern countries.
Therefore, the Savannah-Simona deal is seen as a progressive integration undertaking aimed at saving the country Sh15 billion (USD 100 million) annually in foreign exchange used to import clinker, especially so given that global clinker prices have more than doubled since the eruption of Covid-19 pandemic, making product’s imports for cement production largely unviable for producers without local production capacities.
