Alliance Concrete Limited invests Ksh600 million in Kenya, avails Ready Mix Concrete (RMC)

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 A group of local and international investors are set to fire up Kenya’s building and construction sector following the setting up of a new ready mix concrete plant.

The investors, who have also sealed an exclusive supply partnership with Savannah Cement are set to launch to market the new Alliance Concrete Limited – to provide ready mix concrete in Nairobi and its environs.

Ready mix concrete refers to factory prepared cement, sand and aggregate mixture delivered to construction sites for immediate application as per the customers’ specifications.

Such deliveries enhance construction project efficiencies by cutting onsite concrete mixing costs and time.

The new firm, with a Ksh600 million investment outlay, will also be seeking to capitalise on projected demand – as the government’s Big Four agenda flagship goal to provide more than 500,000 affordable housing units gets underway.

The firm’s batching plants located in Kitengela and Dagoretti – will be exclusively fed with Savannah Cement products and formulated to meet specific needs from single unit domestic dwelling construction to large scale project works.

At its Nairobi production base, Alliance Concrete Limited has installed a 120 cubic meters per hour batching plant. The plant is complemented by a fleet of 15 Concrete Truck Mixers, two- fixed pumps and two boom pumps with over 40 metre pumping capacity.

The firm’s General Manager, Kemal Gocmen, said the firm has invested in state of the art concrete batching plants and related customer delivery infrastructure – to meet growing market demand.

He further said the firm will be banking on a similar experience gained in Turkey – to develop the local market potential. “After having spent almost two decades in the ready mix concrete market in Turkey, which is the biggest RMC producer in Europe, we brought our expertise to Kenya to meet the challenging demands of its booming construction sector by using our large, modern fleet and fully automatic plants situated strategically in Nairobi,” Gocmen said.

Savannah Cement Managing Director Ronald Ndegwa said the firm had moved to seal the partnership with Alliance Concrete as part of a market diversification strategy.

“As a manufacturer we are exploring alternative market opportunities to guarantee our growth in an increasingly competitive market,” Ndegwa said, adding, “Such diversification includes raising the volume of ready mix concrete deliveries in association with Alliance Concrete to complement the existing bagged and bulk cement sales.”

According to the Kenya National Bureau of Statistics (KNBS) Quarterly GDP Report, the Construction sector grew by 7.2% in the first quarter of 2018 – compared to a 8.2 % growth realised in the first quarter of 2017.

The deceleration was reflected in the decline in the consumption of cement – from 1.5 million tonnes in the first quarter of 2017, to 1.4 million tonnes.

The construction sector is however showing signs of recovery as credit to the construction sector increased by 7.5% – compared to a growth of 2.6% realised in the first quarter of 2017 that has been blamed on the interest rate capping.

Source: African Strategic-Ventures (ASV) & The Exchange.