Savannah Cement, a Kenyan cement producer, is set to begin operations in Rwanda early next year, once it gets the approval from the Rwanda Standards Board (RSB).
Speaking on the sidelines of the just-concluded East Africa Business Summit in Kigali, Savanna’s Ronald Ndegwa, said the company was attracted to the Rwandan market because of its vibrant nature and the country’s attractive investment climate.
“We are required to test and certify our cement before we can enter the market. That’s why we are looking forward to the harmonisation of standards across the East African Community bloc, where if a firm has certification from the Kenya Bureau of Standards, for example, is not subjected to another certification process to avoid such delays,” he noted.
He said that once RSB is done with the testing in the next two to three months, they will identify local distributers who can access the product and serve other retailers like contractors and government projects in order to have them penetrate the market.
“Ultimately, as the market grows, if it becomes viable to open a grinding station here we will open one,” he said.
The firm, with a capacity to produce 1.5 million tonnes of cement per year has operations in Ugandan, South Sudan and northern Tanzania. Once in Rwanda, the company will compete with local producer, Cimerwa and Ugandan-based Hima Cement, a factor Ndegwa believes will lead to affordable prices thus boosting the housing sector.
According to the Ministry of Trade and Industry estimates, local demand for cement is at 400,000 tonnes a year. Cimerwa currently produces 110,000 tonnes of cement and Hima supplies about 200,000 tonnnes annually.
Savannah Cement’s entry could be a huge relief for the real estate sector that has long complained about low cement supplies and high prices.
Central bank statistics for the first quarter of 2014 indicate that the construction sector recorded a 8 per cent growth, a trend which is likely to continue as the general economy recovers from last year’s slowdown.