IFC acquires stake, injects Sh6b in Kenyan cement firm
Posted on : Saturday, 27th September 2014
The cash will enable National Cement Company expand its operations and create over 6,000 jobs
he International Finance Corporation (IFC), a private sector lending arm of the World Bank, will inject Sh5.9 billion ($70m) into National Cement Company Limited, a member of the Devki Group Of Companies formed in 2008.
The cash injection will enable the Athi River-based firm expand operations, increase local supply of cement and promote infrastructure development in Africa.
This is part of the Sh6.4 billion deal that was agreed upon in February between IFC and the cement firm.
Under the arrangement, IFC will provide $55 million in debt. In addition, IFC and the IFC African, Latin American and Caribbean Fund will inject $15 million in equity into National Cement and will have a seat on the company’s board.
IFC investment will enable the firm to multiply its production five-fold to 1.7 million metric tonnes per year. National Cement plans to expand its cement factory in Nairobi, creating over 6,000 jobs. Small businesses that transport the firm’s raw materials and provide general services will also benefit economically.
Devki Group Chairman Narendra Raval said by partnering with IFC, National Cement looks forward to combining its experience in Kenya’s building materials sector with IFC’s international expertise in infrastructure and environment management.
As National Cement expands, we aim to contribute actively to improving infrastructure and housing in Kenya,” he said.
Oumar Seydi, IFC director for Eastern and Southern Africa said Kenya often imports cement at high costs, adding, “We would like to send a strong signal of IFC’s confidence in a Kenyan company making a difference in the local economy.
National Cement Company Limited was formed to construct and operate a a cement plant in the heart of Athi River, about 50 km from Nairobi City.
The New 2,000,000 tonnes per year dry cement plant incorporates modern control and cutting edge technologies, which include a Vertical Roller Mill, a Preheater, a Calciner, a Clinker Cooler and Ball Mill.
This equity injection will see National Cement undergo a two-phase expansion expected to be completed by 2016. The company has acquired 2,200 acres/890 ha of land between Merrueshi and Mbirikani (Kajiado County) with limestone and clay deposits on which it will build and operate the clinker production facility.
The area is estimated to have up to 60 million tonnes of limestone reserves, sufficient reserves for up to 45 years of production. The clinker plant will have a capacity of 1.1 metric tonnes per year when completed in 2016.
