New Kenyan firms ride on low prices to grow sales

New Kenyan firms ride on low prices to grow sales
Published: 27 January 2011

Cheaper pricing has won newly set up cement manufacturers about 14 per cent market share from their rivals, signalling a deepening shift in the industry that has for years been dominated by three producers.

Industry statistics by African Alliance Investment Bank show that Mombasa Cement and National Cement – both established in the past two years – now control a combined market share of more than a 10th of the local cement market.

Bamburi Cement, which accounted for 61 per cent of cement sold in the market in 2009, has seen its market share drop to 50 per cent, while East African Portland Cement Company (EAPCC’s) market share has fallen by five per cent to 25 per cent.

Athi River Mining (ARM) has, however, recorded a marginal gain according to the African Alliance data, edging up by 2.5 percentage points to 11 per cent.

The three manufacturers are listed at the Nairobi Stock Exchange.

“The entry of these new cement makers has seen the bigger players cede significant market shares as their cement is cheaper,” said Francis Mwangi, a research analyst at African Alliance.

National Cement is currently selling a 50kg bag at Sh660, EAPC Sh650 and Bamburi Sh700 on its regular brand—Nguvu.

Mombasa Cement’s retail price is Sh600, while the lowest brand is ARM’s rhino cement retailing at Sh670 per bag.