One of the major cement producers in Kenya. Cemtech is expected to raise
the bar in production technology. Picture: Anthony Kamau
By CHARLES WOKABI Special Correspondent
In Summary
- The latest entrant is Cemtech Ltd which is expected to begin construction of a plant in West Pokot in Kenya’s Rift Valley, with an annual production capacity of 1.2 million tonnes per year.
- As cement firms seek entry into the East African market and fight for a controlling stake, customers are bound to benefit from lower pricing due to price wars.
- In Uganda, a surge in production is also expected with the entry of Moroto Cement whose production capacity is estimated at 3,000 metric tonnes per day.
Cement prices in the East African region are
likely to fall significantly this year following the entry of new
manufacturers into the sector.
A number of firms are set to start production in
coming months while some existing cement makers plan to boost capacity
to meet the growing demand.
The EAC region is on a massive infrastructure
upgrade, which should push up demand for cement in coming years, as
nations invest in roads, ports and bridges, railway construction and
energy projects.
The latest entrant is Cemtech Ltd which is
expected to begin construction of a plant in West Pokot in Kenya’s Rift
Valley, with an annual production capacity of 1.2 million tonnes per
year. This will bring to seven the total number of cement manufacturers
in Kenya.
In an interview with The EastAfrican last
week, Cemtech Kenya director Rajesh Kumar Rawal said: “Geological
evaluations will be complete by the end of this month and we expect
construction work to start in April.”
A subsidiary of Sanghi Industries Ltd, the world’s
largest cement manufacturer, the new plant will be constructed at an
estimated cost of Ksh20 billion ($120 million).
Cemtech Ltd’s construction comes hot on the heels
of the launch of another firm, Savannah Cement Ltd, which began
production at its Athi River plant towards the end of last year.
Savannah has an annual production capacity of 1.5 million tonnes and the potential to double this output.
In its November issue of the Leading Economic
Indicators, the Kenya National Bureau of Statistics said the quantity of
cement produced increased by 6 per cent from 352,800 metric tonnes in
September 2012 to 373,916 metric tonnes in October.
However, consumption fell by 2.3 per cent from
300,432 metric tonnes in August to 293,571 metric tonnes in September of
the same year.
The decline was associated with the completion of
mega projects such as the Thika super highway as well as the high
interest rates, which stalled many large scale construction projects.
As cement firms seek entry into the East African
market and fight for a controlling stake, customers are bound to benefit
from lower pricing due to price wars.
“The entry of new firms will intensify competition and consequently the price of cement is likely to drop,” said Mr Rawal.
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