ARM Cement, which is a producer and major supplier of cement in Kenya and Africa in general, recently went into the administration with a debt of over US$140mn. Raysut Cement has expressed its interest to the administrators to acquire the company, a statement released by the company said.
The acquisition, which is estimated to be valued at over US$100mn, will complement Raysut Cement’s revised strategy to manufacture clinker in proximity to the markets it supplies to in East Africa, according to a press release.
Raysut Cement is already in the process of setting up a grinding unit in Somaliland and Mogadishu in Somalia with a Dubai-based partner. The company is also in advanced discussions to acquire various cement producers in Uganda and Djibouti.
Plans are also afoot to build a 1mn tonne per annum cement plant in Berbera, Somalia and the construction work could start as early as January 2019. Raysut Cement is also in advanced negotiations with Kampala Cement.
Raysut Cement is one of the major clinker suppliers to the East African region and the ARM Cement assets will fit very well with its plans for East Africa, where in the last quarter alone it supplied over 300,000 tonnes of clinker from its home plant in Salalah to Kenya and Tanzania.
According to the industry reports, Joey Ghose, group CEO of Raysut Cement had presented a five-year strategy to grow Raysut Cement into a 20mn tonnes company by 2022. The proposal of Ghose has been approved at a recent board meeting with significant support from all stakeholders of the company, including the government representatives.
The group is also building a 1mn tonnes capacity plant in Georgia, near Tbilisi.