Gujarat-based Sanghi Industries, part of the Rs 4,500-crore Sanghi Group, has bought land in Kenya to build a cement plant, making it the first Indian company to do so in the east African country. Sanghi plans to build a 1.2-million-tonne cement plant, along with local partnership, in a bid to cater to a growing African market and to also serve neighbouring countries, said people connected with the development.

Sanghi, along with its unnamed local partner, has already bought 650 acres in Kenya and expects to start the first phase in June, said the people close to the development. Actual production is expected by first quarter of 2012, they added.

Sanghi Industries director Alok Sanghi told ET: “I cannot comment anything at this stage as nothing has been finalised. A few Kenyan firms have informally approached us, and if anything is finalised, the company will inform the stock exchanges.” Shares of Sanghi Industries were down 2.67% at Rs 27.35 on BSE on Thursday.

Sanghi’s plan, although part of a recent trend, is a first in a building material like cement. Indian companies have been buying land overseas, especially in east African countries such as Kenya and Ethiopia and Sudan. But this land has been typically used for agricultural business, as direct investment in India is fraught with bureaucratic hurdles and companies planning to enter the farm business, have been frustrated in their efforts to do so.

Sanghi Industries currently operates a 2.6-million-tonne cement plant in Kutch and is in the middle of an expansion programme that is estimated to cost Rs 1,100 crore.

Economic Times