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The East African - - ADVERTISEMENT JOB SCAN -

Salalah, Oman to Kenya and Tan­za­nia.

Tripling pro­duc­tion

With these ex­pan­sion plans, to be funded through in­ter­nal funds and bank loans, Ray­sut in­tends to more than triple its pro­duc­tion ca­pac­ity to 20 mil­lion-tonne from its cur­rent six mil­lion tonnes.

If suc­cess­ful, Ray­sut will have re­gional op­er­a­tions in Kenya, Uganda, Tan­za­nia and Rwanda.

How­ever, the Oman-based firm will also have to con­tend with com­pe­ti­tion from Nige­ria-based Dan­gote, which is also eyeing an en­try into Kenya and Rwanda via a buy­out of the ARM as­sets.

Last month, Dan­gote said it planned to buy out trou­bled re­gional ce­ment firm, Athi River Min­ing Ce­ment be­fore mid-next year, ef­fec­tively giv­ing it control the re­gion’s ce­ment mar­ket.

Bid­ding war

The buy­out if suc­cess­ful, will see the Nige­rian firm aban­don its orig­i­nal plan to con­struct two plants in Rwanda, three in Dar es Salaam, and one in Bu­rundi, with an­other in Jinja, Uganda.

It had also planned to start pro­duc­ing ce­ment in Kenya through its Ki­tui-based plant with an an­nual pro­duc­tion ca­pac­ity of three mil­lion tonnes.

“We plan to list our busi­ness at the Lon­don Stock Ex­change. In prepa­ra­tion, we are con­sol­i­dat­ing our ce­ment busi­ness. This has seen us in­crease ca­pac­ity in var­i­ous mar­kets and make sev­eral ac­qui­si­tions ahead of the IPO. There is also a ce­ment com­pany with op­er­a­tions in Tan­za­nia, Kenya and Rwanda and we hope to take them over,” Dan­gote Group chair­man Aliko Dan­gote told

Dan­gote is vy­ing with three other African com­peti­tors La­farge­hol­cim, Hei­del­berg Ce­ment AG, and Ti­tan Ce­ment Co. SA of Greece for the ac­qui­si­tion of ARM Ce­ment.

Even as ce­ment man­u­fac­tur­ers strug­gle with ei­ther re­duced rev­enues, pro­duc­tion chal­lenges or the high cost of do­ing busi­ness, the re­gion is ex­pect­ing to see an in­creased pro­duc­tion ca­pac­ity.

The es­ti­mated plant util­i­sa­tion rate within the re­gion is 61.7 per cent but Dyer & Blair In­vest­ment Bank pre­dicts that this will fall to 45.4 per cent by the end of month, cast­ing doubt on the ef­fec­tive­ness of these ex­pan­sion moves.

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