The Gupta-like capture of Kenya’s steel and cement sector, that has everyone speaking Guru

Every Kenyan president in the multiparty era that has sought to mobilise for re-election has had to craft deals with Indian brokers from Goldenberg with Kamlesh Patni, Triton with Yagnesh Devani, and Anglo Leasing with the Deepak Kamani circle.

And maybe, the Jubilee administration had Guru, whose name has been brought into the center of the political fallout between Kenya Kwanza, the offshoot of the former administration that won the August 2022 election.

Both the former Deputy President Rigathi Gachagua and former Attorney General and Cabinet Minister Justin Muturi have said Guru, Narendra Raval, is at the center of Kenya’s scandalous fake fertilizer and the direct beneficiary of the affordable housing projects, which, if proven true, would make him the apex predator in this game.

Mr Gachagua claimed that the 40,000 tonnes of free fertilizer that Kenya received from Russia was given to a company belonging to Narendra, adding that even the fake fertilizer that was flagged by the Kenya Bureau of Standards was imported by the tycoon.

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It is easy to dismiss Muturi’s and Gachagua’s description of Narendra as "President Ruto's Gupta” as the rantings of jilted individuals.

The Brahmin priest

But who is Guru. Mr Raval’s memory of his childhood is centered around his lack of shoes and how dirt poor his family had been that he got sent to the temple as an 11-year-old and turned into a Brahmin priest.

“I regret my childhood,” he told Business Daily’s Jackson Biko, “I never had a childhood, I was a priest from 11 years old, so I never knew how to be a child,” he said.

His other core memory is his dream of owning a helicopter; but this barefoot boy in India would actually live to own not one but several helicopters under Northwood Agencies Ltd, a helicopter charter company that fit at the apex of the large empire he built in East Africa.

Besides aviation, which stemmed from his hobby for flying, Mr Raval has interests in steel making, cement manufacturing, and roofing materials. His stable includes Devki Steel Mills, roofing sheets maker Maisha Mabati Mills, National Cement, which makes ‘Simba Cement’, and Northwood

Rise of political capitalism

He almost made a beeline for the sugar industry when he bid for Mumias Sugar, as the result of bitter rivalry with fellow Businessman Jaswant Rai, who had blocked his path for growth under the President Uhuru Kenyatta’s administration.

Mr Raval is not new to the President’s ears. Raval, the fortune teller priest, has been friends with four of Kenya’s presidents. He says he learned punctuality from President Daniel Moi, who would not see you if you were ever late for an appointment.

He played a big role in ensuring that Kenya's third President Mwai Kibaki appointed Kalonzo Musyoka as his vice president after the disputed 2007 polls, as Kalonzo confirmed in his 2016 memoir, ‘Against All Odds.’

Devki Group’s National Cement Company (NCC) expanded rapidly under the Jubilee administration, acquiring Athi River Mining, Cemtech, and Nakuru Salgaa plant. The merger with Cemtech in West Pokot gave it significant limestone and clay deposits that are key components in its cement production, as he was setting up another clinker line in Kajiado and a cement plant in Kilifi County.

Rairivalry

Under the tenure of President Kenyatta, his empire grew from his dealings with the powers that be, but was limited by internal competition, something he would seek to eliminate and succeed, only for his success to prove the failure of an entire country.

As he was consolidating this cement empire, Mr Rai was also coming into the sector under the favour of the jubilee administration that had seen him consolidate the sugar sector. Mr Rai who was also big with soap and edible oils entered the cement business through Rai Cement in Muhoroni.

In order to grow, Mr Rai made a bid for ARM when Mr Raval was trying to acquire the Pradeep Praunrana company that had collapsed, sparking a bidding war.

In turn, Mr Raval also made an attempt at entering the sugar business through Mumias Sugar, but pulled out of the bid after political leaders from western Kenya questioned the process of reviving the miller.

In the end, Guru triumphed, albeit at a huge cost in litigation and time. But now he had holdings over the raw materials that put him in a position to control limestone, critical for the production of clinker, the primary raw material for cement in East Africa. He asked president Kenyatta for a monopoly.

Compe ni compe

Mr Guru argued in the media that he had the capacity to provide the country with enough clinker, saving the country from burning its dwindling reserves of dollars by importing this raw material. He wanted the Jubilee administration to increase the import duty on clinker from 10 to 25 percent.

But for the last few years of President Uhuru Kenyatta’s tenure, he had to arbitrate the business interests of his other friends, including Rai, which meant that he could not hand Guru the exclusive rights over clinker by banning importation of the raw materials. 

It also emerged that in the lead up to the 2022 elections, relations between Guru and Uhuru had somewhat soured. His steel businesses took a hit when President Kenyatta banned trade in scrap metal, denying him this critical raw material in the country’s steel-making. There have been unconfirmed whispers that Uhuru himself prohibited the melting of scrap metal so that his family could import billets.

Billets are semi-finished steel products that serve as raw materials for manufacturing a wide range of finished steel items. With billets, you don’t need scrap metal.

Moments after Guru’s attempts to have import duty increased failed, I confronted him with the question of whether he was close to the President.

“My steel business has been affected; we can’t get scrap metal. If I were close to the president, would I be suffering as I am?” He posed.

Guru would retreat, hoping and praying that his bet on William Ruto in the August 9 elections would pay off.

Then Ruto was elected President.

When President William Ruto took over, he granted Mr Guru his wish and included the export promotion levy in the contested Finance Bill. While the youth fought to the death to kill this bill, Mr Guru went to the courts to defend it, looking at the narrow interests of what it would grant his empire- sole control of the cement sector.

Part 2 The cement and steel tarrifs that had Guru singing Kanu’s a hundred years

...A few months to the tabling of the Finance Bill 2023, representatives of five leading cement manufacturers invited one of our reporters for an urgent meeting in a high-end hotel in Nairobi. It was cold, but one you could detect a streak of sweat on some of their faces.

“We don’t know what he (Narendra) is planning, but he is up to no good,” said one of them...