Flour Tycoons Rescue Savannah Cement in Sh3.8 Billion Deal

A consortium of established flour milling magnates has acquired bankrupt Savannah Cement for Sh3.8 billion, marking the end of a two-year search for buyers and potentially reshaping Kenya’s competitive cement landscape.

The wealthy investors, with deep roots in Kenya’s flour milling industry, successfully concluded the acquisition of the troubled cement manufacturer through a newly registered entity called Savannah Cement 2025 Limited. The deal represents a significant consolidation move that could intensify competition in Kenya’s lucrative cement market, which has attracted increasing interest from billionaire investors seeking to capitalize on the country’s construction boom.

The acquisition was structured through three investment vehicles that hold equal stakes in the new company. Montgate Holdings, fully owned by Hafeez Amin Manji, brings expertise from Mini Bakeries, the company behind the popular Supa Loaf bread brand that has maintained a significant presence in Kenya’s competitive bread market for decades.

SMA Investments represents the interests of Muhammed Salim Taib, Said Salim, and Abubakar Salim Ahmed, who collectively control a substantial milling empire spanning Kitui Flour Millers, Rafiki Millers, and Eldoret Grains Limited. This influential group has demonstrated their diversification strategy through their ownership of Busia Sugar Industries, which recently acquired South Nyanza Sugar Company, expanding their footprint beyond grain processing into sugar manufacturing.

The third partner, Mo Ali Kenya, is controlled by Ali Yishma and Mohammed Islam, who have built their fortune through Mombasa Maize Millers. Established in 1978, this company has become one of Kenya’s leading grain processors, known for producing popular brands such as Ndovu maize meal, Bahari maize meal, and Taifa maize meal that have become household names across the country.

Competition Authority of Kenya Director-General David Kemei confirmed the transaction received unconditional approval on August 25, 2025, emphasizing its potential to preserve employment and ensure continued productivity of the cement manufacturer’s substantial assets. The approval came after authorities determined the acquisition would not substantially prevent or lessen competition in the market.

The successful bid concludes a lengthy receivership process that began when KCB Bank Kenya and Absa Bank placed Savannah Cement under administration in May 2023 due to overwhelming debt obligations totaling over Sh14 billion. The two financial institutions had become increasingly concerned about the company’s ability to service its obligations, with KCB holding the largest exposure at Sh8.89 billion while Absa faced potential losses of Sh5.23 billion.

Peter Kahi, a partner at audit firm PKF Kenya, was appointed as administrator to oversee the complex sale process. The cement manufacturer had attracted over a dozen local and international suitors during the extended bidding period, reflecting the strategic value of its assets and the growing appeal of Kenya’s cement market among serious investors.

Savannah Cement’s financial troubles had been mounting for several years before the administration. The company reported a devastating net loss of Sh2.5 billion in 2022, while its total debt burden had ballooned to approximately Sh18 billion by the time administrators took control. These difficulties were attributed to a combination of mismanagement and fraudulent practices that severely impacted operations and led to production stoppages.

Despite these challenges, the acquisition includes substantial industrial assets that make the investment attractive to the new owners. The main industrial property alone is valued at Sh10.1 billion, representing the largest component of the transaction. Additional assets include a strategically located 2.5-acre parcel in Kitengela valued at Sh750 million, providing the consortium with significant real estate holdings alongside the core manufacturing capabilities.

The timing of this acquisition coincides with a broader consolidation trend sweeping through Kenya’s cement industry. Wealthy investors are increasingly recognizing the sector’s potential, driven by sustained demand from the country’s construction boom and infrastructure development projects. This move follows closely behind Tanzanian tycoon Edha Abdallah Munif’s acquisition of Bamburi Cement and his ongoing efforts to secure an additional 29.2 percent stake in East Africa Portland Cement Company.

Should Munif succeed in his Portland Cement bid, his combined holdings would give him direct and indirect control over approximately 31 percent of Kenya’s total cement production capacity. This level of market concentration sets up an intriguing competitive dynamic with other major industry players, including the Rai family’s Rai Cement operations located at the border of Kisumu and Kericho counties, and Narendra Raval’s diversified cement empire encompassing National Cement, ARM, and Cemtech.

Current market dynamics show Mombasa Cement leading the sector with a commanding 33 percent market share, followed by National Cement at 26 percent and Bamburi holding 22 percent of the market. East Africa Portland Cement maintains a 10 percent share, while Rai Cement controls 5 percent. Before its financial troubles, Savannah Cement held a 1.5 percent market share, tied with Ndovu Cement for sixth position among local producers.

Industry analysts expect Kenya’s cement market to undergo significant changes in 2025 as several companies pursue planned expansions of their clinker production capacity. These developments, including initiatives by Simba Cement and Portland Cement, are expected to lower production costs across the industry and potentially reshape competitive dynamics as companies compete for market share in an increasingly crowded field.

The entry of experienced flour milling entrepreneurs into cement manufacturing brings valuable operational expertise from related industrial sectors. Their deep understanding of large-scale production processes, sophisticated supply chain management, and extensive distribution networks could prove instrumental in Savannah Cement’s revival and future growth prospects.

From an employment perspective, the deal is expected to preserve existing jobs at Savannah Cement’s facilities while potentially creating additional opportunities as the new ownership team works to restore full production capacity. The transaction ensures that a significant manufacturing asset remains operational rather than being liquidated, maintaining crucial industrial capacity within Kenya’s construction materials sector.

The Savannah Cement acquisition represents more than just a corporate rescue mission. It demonstrates the ongoing confidence of established Kenyan business families in the country’s construction and infrastructure sectors, even amid economic uncertainties. As the new ownership team applies their proven manufacturing expertise to cement production, the industry may witness renewed innovation and competition that could ultimately benefit consumers and support the broader construction sector’s continued growth.

This transaction also provides a notable example of successful debt recovery through strategic acquisition, potentially offering a template for resolving similar corporate distress situations in Kenya’s manufacturing landscape. The deal’s completion shows how patient capital and experienced management can breathe new life into troubled but fundamentally viable industrial assets.

Looking ahead, the revitalized Savannah Cement under its new ownership is positioned to compete more effectively in a market that continues to benefit from Kenya’s urbanization trends and infrastructure development needs. The combination of the investors’ financial resources, operational experience, and strategic vision could transform the company from a distressed asset into a meaningful competitor in the country’s dynamic cement industry.