Another cement manufacturer is set to enter the Uganda market, raising hopes that prices will come down and spur growth in the construction industry.
National Cement, a Kenyan manufacturer, has unveiled plans to invest $195-million in a new manufacturing plant in Uganda. The plant will be located in Mbale, some 270 km east of the capital, Kampala, and will have a nameplate capacity of one-million tons a year. It will also include a clinker plant to guarantee supply of the raw material.
“Construction of the first phase of the project is expected to commence in May, after which we will continue expanding the plant over a three-year period,” says Devki Group chairperson Narendra Raval. Devki Group is the parent company of National Cement, a Kenya-based cement manufacturer that produces 1.6-million tons a year.
The company has already secured finance from the International Finance Corporation (IFC) and two local banks and is preparing to break ground next month.
According to the Uganda Bureau of Statistics, the cost of cement in Uganda was about $124/t in 2013, which was higher than the global average of $77/t and the sub-Saharan Africa average of $100/t.
Uganda currently imports cement from Egypt, Pakistan and Kenya to supplement local production.
The country has two main cement manufacturers, Hima Cement, which is owned by Lafarge Group, and Tororo Cement. The two producers have a combined capacity of 3.6- million tons a year.
Two new companies, Kuwait-based DAO Group and China National Machinery Import & Export Corporation, are investing in new cement manufacturing plants with a combined price tag of $400-million and total production capacity of 1.6- million tons a year.
According to Raval, National Cement’s entry into Uganda is part of a strategy to capture a huge chunk of the market in East Africa. The company also intends to venture into South Sudan.
National Cement was established in 2008.