Kenya’s ARM Cement Acquires Rwandan Manufacturer

Byrebecca3360

Updated Thu, 03 Jul 2014 16:33:25 GMT

Kenya’s second-biggest cement producer, ARM has completed the acquisition of Rwanda’s Kigali Cement as it continues expanding its East African market reach.

The Kenyan company, which has held a 35 percent stake in the only privately-owned cement company in Rwanda since 2011, bought out the remaining 65 percent stake held by various shareholders to take complete control of the firm. The deal was finalized in April.

“We finally acquired a 100 percent equity stake and full control of our Rwanda grinding plant,” a newly released annual report by the company quoted Chairman, Rick Ashley as saying.

According to Ashly, the company also plans to increase its capacity and market share using its flagship brand, Rhino Cement.

The value of the deal was not disclosed, but it is estimated to cost over Sh106 million ($1.2 million), going by the Rwandan company’s net asset value and will be financed by banks, according to Pradeep Paunrana, ARM chief executive.

The acquisition is part of its expansion plans which seeks to invest more in the Rwandan subsidiary to improve sales in the country and neighbouring markets. The company will leverage on its new acquisition to expand its production and distribution network in East Africa.

Ashley says ARM will seek further measures to increase market presence in Kenya, East Africa’s largest economy, as well as Rwanda and Tanzania, completing ongoing projects and focusing on new markets in the region.

Kigali Cement, who has Sh163.5 million ($1.9 million) in net assets (as at 2013), has capacity to produce 100,000 tonnes per annum, which is expected to increase with further ARM investments.

ARM is expected to commission Tanzania’s Tanga plant – which holds a production capacity of 1.2 million tonnes of cement per year – in the fourth quarter of this year. It will also start construction of its Sh26 billion ($300 million) Kitui factory (Kenya) in October. The facility be fitted with 8,000 tonnes capacity.