The progress in executing the Standard Gauge Railway (SGR) has
injected a new vibrancy into the construction industry, sending companies
on higher profit margins and luring more foreign investors into the sector.
Kenyan construction industry’s major players, Bamburi Cement, which won a
tender to provide cement to the railway project, has linked higher profit margins
and growth to the ongoing railway project. The speedy implementation of the project,
so far at 75 percent completion rate as of April 2016, has also kicked off competition
amongst the largest cement manufacturers and suppliers.
In response to the growing demand for cement required to undertake the ongoing
infrastructure project, cement firms, including the Athi River Mining (ARM)
Cement, have been able to attract foreign investors.
In May, 2016, ARM announced a massive US$140 million Foreign Direct
Investment (FDI) into the company from CDC, a British firm, injecting further liquidity
into the cement firm. President Uhuru Kenyatta’s government
has been laying greater emphasis on the timely completion of the project. The
project aim is to rapidly cut down the cost of passenger transport and freight movement
from the Port City of Mombasa to other smaller towns in Kenya and across Eastern Africa.
According to Pratik Sanghrajka, a senior manager at Nitro Chemicals a firm that
was contracted in 2014 to supply explosives for all phases of the project, admits
that it is the best deal they have ever clinched. “In fact, it is worth more than
double the amount of business the firm has had to date,” He said.
The company, which also supplies blasting materials to virtually all major cement
manufacturers in the country, has had to double its imports of materials. This has
required the outsourcing of more trucks for transport, hiring of more personnel,
and, due to the sensitivity of the products,
“I am happy with the fact that other local steel companies have got an opportunity to participate in the project. A project of this magnitude cannot rely on one supplier.” Bobby Johnson Director at Steel Makers
hiring of more police officers to escort the explosives to SGR sites. “Before, we only needed two officers for a simple delivery from Mombasa to Nairobi,” said Mr Pratik.