Simba Cement Company acquires Cemtech

Written By: Allan Aoko

Simba Cement Company Limited has been given the green light to acquire the entire business and assets of Cemtech Company Limited.

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Competition Authority of Kenya which okayed the acquisition says the move which is unlikely to disrupt the market is also backed by Cemtech’s decade-long dormancy and consistence search for a strategic partner to finance construction of a cement plant.

Simba Cement is operating under National Cement brand name and holds 8% of the market share, which is the lowest.

Bamburi Cement Limited holds the largest share of the cement market at 33%, Mombasa Cement Limited at 16%, East African Portland Cement Company at 15%, Savannah Cement 15% and Athi River Mining Africa Limited 13%.

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Simba Cement will now have access to Cemtech Company Limited Limestone and clay deposits in West Pokot County including all the licenses expanding it cement production capacity given that limestone and clay are key inputs used in clinker production.

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With merger agreement approval sealed Simba Cement will now acquire 100 percent business and assets of the Cemtech Limited.

CAK says the assets acquired include land, business intellectual property, business records, equipment, goodwill, licenses, stock and third party rights.

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Approving the merger, CAK says “The proposed transaction qualifies as a merger within the meaning of Section 2 and 41 of the Competition Act No.12 of 2010. Cemtech had no turnover for the preceding year and, therefore, for purposes of evaluating the proposed transaction, its assets, in lieu of turnover, werre considered.”

Nonetheless, the authority and stakeholders welcome the merger in which they believe will resuscitate the dormant firm, create jobs and raise the economic profile especially for the citizens of West Pokot County.

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Once the deal is operational, Cemtech envisions distributing its products across the country just as Simba Cement does with its cement product.

This move, according to CAK, is projected to boost the economy through cement production.

Kenya National Bureau of Statistics latest data shows that cement production decreased by 8.2% from 6.7 Million tonnes in 2016 to 6.2 Million tonnes in 2017.

Similarly, cement consumption and stocks decreased from 6.3 Million tonnes in 2016 to 5.8 Million tonnes in 2017 owing to reduced demand in the construction sector.


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