Salalah, Oman to Kenya and Tanzania.
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.
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.