Uganda has launched a new $600 million clinker plant, posing a challenge to Simba Cement’s control of the region and potentially limiting its ability to sell to Kampala.
This comes at a time when Simba Cement, owned by steel tycoon Narendra Raval, is set to operationalise its $250 million West Pokot Cement plant as the firm targets to sell surplus clinker to Uganda and other neighbouring countries.
However, the Uganda plant launched by President Yoweri Museveni last week may scatter Simba Cement’s prospects of selling the clinker to Uganda.
While launching the plant, President Museveni said his country was keen on ending expensive clinker imports.
“Uganda will soon stop importing clinker,” President Museveni said during the groundbreaking of the plant in Karamoja.
Pundits say the factory by West International Holding Cement Uganda will fill the clinker gap the country faces and stabilise prices of cement on the local market.
The new plant will boost production and bridge the current deficit. It is projected to produce at least four million tonnes per year, adding to one million tonnes per annum that is generated by Tororo and Hima cement factories. Another subsidiary plant in Mayuge will produce three million tonnes.
Uganda’s demand for clinker stands at nine million tonnes a year and the combined production capacity for the three firms will be eight million tonnes.
Data from the Uganda Revenue Authority shows in the 2021/2022 financial year, Uganda imported 2.7 million tonnes of clinker valued at $674 million.
The commissioning of the West Pokot plant would make Narendra Raval the largest producer of clinker in East Africa with the production of 7.5 million tonnes from his three factories.
Simba Cement said in June that it had inked long-term contracts that will see it export up to $192 million worth of clinker to the neighbouring countries annually.
The company has targeted regional markets of Rwanda, Uganda, and Burundi given the proximity of the new plant to these countries.