Kuwaiti-based, Dao Group plans to put up a third cement factory in Uganda to compete with Hima Cement in Kasese district and Tororo Cement in Tororo district. The company has branches in Iraq, Pakistan and the Middle East, mainly dealing in oil and gas, power generation and transmission as well as construction.
The entry of a third player will come at a time when a 50kg bag of cement costs UGX32,000 (US$11.87), up from UGX27,000 (US$10) two years ago.
Mohammad Aoun, the CEO of Dao Africa Ltd, says the company comes to the market with what they have called improved technology to produce premium finer cement. He added that their prices would be lower than market price.
"Local production for cement doesn't cover the whole demand in Uganda. That is why imports are high. This also causes the prices to go up. Dao will put a product on the market which is less costly and have an edge in price," Aoun said.
President Yoweri Museveni launched the US$150m investment cement plant in Budaka, where ultra-modern machinery will be put up, starting January 2013. The plant will have a production capacity of 5000tpd of premium-grade cement. Company officials say this will make the plant the biggest and yet youngest cement factory in Uganda and among the top two in the East African region.
Aoun says the company will also set up its second cement factory to be located in Moroto district. The factory here will produce different varieties of cement, and adhesive for tiles.
By setting up in the Karamoja and Bugisu sub- regions, the company promises to improve the infrastructure in the areas where it operates. Company officials also say their investment will create an estimated 10,000 jobs. The combined number of jobs to be created could double when the Karamoja factory is complete.