Nairobi — Athi River Mining Ltd (ARM) will consolidate its divisions into two wholly owned subsidiaries as it moves to focus on its core business as a cement maker.

The company will also invest Sh12.5 billion to enhance the capacity of its plants.

Starting January next year, the firm will create ARM Cement Ltd for cement, lime and related products, and ARM Minerals and Chemicals Ltd for minerals, sodium silicate and speciality building products.

ARM managing director Pradeep Paunrana said the reason for creating the structure is to form two strong and focused companies which will protect each subsidiary from any volatility in the business of each other.

"The new structure will enhance the possibility of attracting new equity investment from strategic investors who have industry specific interests," said Mr Paunrana during a media briefing on Monday at the company's premises.

As the focus shifts to cement making - an arm that is expected to contribute more than 80 per cent of the company's overall business - the firm has announced Sh12.5 billion enhanced capacity programme.

Athi River Mining will double capacity for its cement plant at Kaloleni in Mombasa to more than 750,000 tonnes per year through upgrading of its existing facility and building of a new grinding plant in Athi River.

Total investment in the plants in Kenya will be Sh2.5 billion.

Mr Paunrana said the company is taking a long-term view in its strategy and anticipates significant growth in demand for cement in the region.

At the same time, ARM has commenced the construction of a 4,500 tonnes per day cement plant in Tanga, Tanzania at an estimated cost of Sh10 billion.

Work has also started for another cement grinding plant in Dar-es-Salam.

The company has set eyes on being the second largest manufacturer of cement in the region in the next two to three years after the projects are complete.

The enhanced capacity in Tanzania will help Athi River to cover the larger Southern Africa Development Community market which includes Angola, Botswana, Madagascar, Malawi, Mauritius and South Africa.

Industry statistics show that there is significant growth potential for the cement industry in East, Central and Southern Africa.

According to ARM, the average per capita cement consumption in Kenya is currently at 65 kilogrammes compared to 350 kilogrammes in South Africa and 510 kilogrammes in Egypt respectively.