German Firm Liebherr Splashes Sh23bn on Kenya Factory

German heavy machinery maker Liebherr is setting up a Sh23 billion assembly factory in Nairobi, in the most clear sign yet that local transport and energy infrastructure projects are pushing up demand for construction equipment.

Liebherr has joined forces with Bico, a Kenyan firm, to put up the facility that will enable it to assemble its road construction and agricultural equipment brands locally.

The two companies have locally registered a new entity, Bico Liebherr, which will oversee the implementation of the project.

Bico Liebherr last year acquired a five-acre parcel of land in Nairobi onto which the assembly plant is being constructed.

The firm plans to set up a showroom at Marereni near Malindi town.

Bico Liebherr founder Andrew Malunga said: “As the counties grapple with the huge mandate of providing residents with good roads and agricultural machinery, there is the challenge of equipment and we expect that this venture will come in handy for the units.”

The plant, which is expected to be operational by June, will produce at least 30 units a month – mainly comprising earth movers and farm equipment.

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The new facility will help lower the prices of heavy machinery such as loaders, forklifts and excavators by nearly 50 per cent.

A new loader, which is imported from Germany for Sh20 million, will be priced at Sh13 million when assembled locally.

The demand for road construction equipment in Kenya is expected to rise over the next five years, buoyed by the government’s ambitious plan to construct a 8,000km road network.

The Kenya Rural Roads Authority, the State agency that oversees rural road construction, last year said that the project would require 1,440 earth movers, 1,080 rollers, and 540 excavators – widening the market for equipment dealers.

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