Money Markets
A man supervises the clearing of bushes at Taru Trading Centre on
December 7, 2014 to make way for construction of the standard gauge
railway. Cement firms are poised to benefit from the project. PHOTO |
LABAN WALLOGA |
NATION MEDIA GROUP
By GEORGE NGIGI, gngigi@ke.nationmedia.com
In Summary
- Eleven-month to November cement production surpassed full-year 2013 tonnage.
- Local market consumed an average 87 per cent of the volume produced compared to 84 per cent in 2013.
- Construction of the standard railway gauge, Terminal Four at Jomo Kenyatta International Airport and road networks in the country are expected to drive up demand for this year.
Cement companies are banking on infrastructure
projects to drive sales this year after the eleven-month to November
production surpassed full-year 2013 tonnage.
Data from Kenya National Bureau of Statistics (KNBS) show that the six cement makers, already operating in excess capacity, produced 5,208,934 metric tonnes by November compared to 4,637,081 metric tonnes in a similar period in 2013 and a total of 5,059,129 metric tonnes in the full 2013.
KNBS data shows the local market consumed an average 87 per cent of the volume produced compared to 84 per cent in 2013.
The growth in the sector is in line with the
rebounding real estate sector which stalled in the last two years due to
high financing costs.
Central Bank of Kenya data shows loans advanced to
the real estate sector by banks increased by Sh85 billion in the 10
months to October last year compared to Sh47.8 billion in a similar
period in 2013.
Construction of the standard railway gauge,
Terminal Four at Jomo Kenyatta International Airport and road networks
in the country are expected to drive up demand for this year.
“The quantities have not been mentioned but we have
agreed on prices with standard gauge railway (contractors),” said
Surendra Bhatia, deputy managing director of ARM Cement.
Savannah Cement confirmed it was in talks with SGR contractors.
“We have been contracted to supply cement products
to a number of sites. For this reason, we are optimistic of winning more
supply lots as work advances beyond the current preparatory stage,”
said Savannah chief executive Ronald Ndegwa.
Other projects expected to drive up cement demand include upcoming malls such as the Sh22.3 billion Garden City Mall, Centum’s Two Rivers Development, and the Sh1 billion Madiba Mall in Nyeri.
There have however been hushed complaints of
Savannah Cement being favoured in government projects. The company
dismissed the claims, arguing that in the case of Terminal 4 at JKIA it
was supplying the Chinese contractor and not the government institution.
Most cement companies have been injecting capital to expand their operations with an eye on an 2015.
No comments :
Post a Comment