The town's first name was Candos, an acronym of the directors' surnames at the NSW Cement Lime and Coal Company. They bought 100 acres from local farmer John Lloyd Junior for £2,000 in 1913 and had surveyor James Dawson lay out the township. The Postmaster General ruled the name change to Kandos in 1915, and by August 1916 the kilns at the new cement works were firing.
The original plant was meant to come from Krupp Bremen. The order was interrupted by the outbreak of WWI in 1914, and the machinery was interned in Portuguese West Africa. Managing director Frank Oakden travelled to the United States and England to source replacement plant, and the works that started cement production in 1916 was the second one Kandos had bought.
From 1928 to 1932 Kandos was the sole cement supplier to the Sydney Harbour Bridge. Lawrence Ennis, Director of Construction at Dorman Long, confirmed it in his 1932 souvenir booklet Bond of Empire and publicly ruled out the Tasmanian competitor in July 1929. The bridge cement came out of Kiln 5.
Cement Australia closed the plant in September 2011 after 95 years of continuous production. Sibelco salvaged the mid-section of Kiln 5 for the Charbon lime plant; the rest remains the subject of a Kandos Museum campaign to save it. The site has no statutory heritage listing, and was sold in June 2025 to a developer proposing a waste-to-fuel plant.