, NAIROBI, Kenya, Oct 4 – ARM Cement has completed the sale of 40 percent stake of the company to foreign investor CDC Group PLC valued at Sh14.1 billion.
The sale saw ARM Cement sell about 350 million shares at a price of Sh40 per ordinary share.
The funds are intended for expansion of its operations in Kenya and Tanzania.
CDC’s long-term investment is designed to help strengthen ARM’s financial structure and to help the company develop to meet the growing demand for sustainably produced cement across sub-Saharan Africa.
In the short-term, CDC will support the company’s plans to expand cement production in Mwingi, helping to bring down the cost of cement to customers based away from the traditional coastal producers.
CDC’s investment will also enable ARM to boost its production capacity and create new jobs.
The supply chain of Small and Medium Enterprises that transport the company’s raw materials and provide general services will also benefit economically from the company’s growth.
ARM, which operated under the brand name Rhino Cement, is one of East Africa’s leading cement manufacturers produces 2.7 million tonnes a year and employs 3,000 people.
Founded in 1974 by HJ Paunrana, ARM (formerly Athi River Mining Ltd) is now led by his son, Pradeep Paunrana, the current Managing Director and Chief Executive of the company.
The company has grown from modest beginnings into East Africa’s second largest producer of cement, with a market share of roughly equivalent to a 15 percent market share.
Cement consumption in Kenya and Tanzania has grown at a rate of around 12 per cent per year, as both countries’ economies grow.
Ketso Gordhan, CDC’s Head of Africa, will be CDC’s representative on the ARM board.
This is CDC’s first direct investment in the cement industry in Africa since the launch of its new investment strategy in 2012.
The firm has also completed the acquisition of the 10.68 percent of the issued ordinary share capital of I&M Holdings.
“I&M is pleased to inform its shareholders and investing public that all the conditions precedent to completion of the acquisition of the sale shares have been fulfilled and the acquisition of the sale shares was completed on September 30, 2016,” the firm said.
CDC Group PLC is a development finance institution wholly owned by the United Kingdom.