Kenya's ARM to build $120 mln Tanzania cement plant
NAIROBI, Oct 9 (Reuters) - Kenya's Athi River Mining (ARM) ATHI.NR said on Thursday it will start work on a $120 million cement plant in Tanzania next week that would be the largest in the east African region.
Once complete in late 2010 the Tanga-based plant have a capacity of 4,000 tonnes a day capacity. A grinding plant will be constructed in the commercial capital Dar es salaam.
"This is going to be the single largest cement plant in the east African region. It will have a significant impact on our company profile," ARM's managing director, Pradeep Paunrana, told Reuters.
He said demand for cement in the region would probably grow at twice the rate of projected economic growth of around 5 to 6 percent in the next few years.
"It (GDP growth) could be much faster in Tanzania. We expect cement consumption in the whole country to double in the next five to seven years," said Paunrana.
Project financing -- part debt, part equity -- was arranged by a number of banks including Barclays and Stanbic, both locally and internationally, he said.
Borrowing for the project was concluded before the global financial crisis, which, he said, will not reduce local demand for cement significantly.
"The fundamentals that drive demand for construction materials like cement are different in east Africa than in the western countries," he said.
"In any case, the cement industry is long term. We are looking at the much longer horizon than the current crisis, which I imagine will be over in the next 18 months or so."
ARM is the third biggest cement-maker in Kenya. (Editing by Greg Mahlich)
