East African industry set for realignment

East African industry set for realignment
Published: 22 March 2010

The East African cement market is set for major re-alignments as leading firms move to increase production capacity in coming months as new entrants roll out plants, paving way for a fierce price war.
 
At least five cement manufacturers across the region — Kenya’s Athi River Mining, Tororo Cement (trading as Mombasa Cement in Kenya) and Hima (owned by Lafarge) in Uganda as well as Tanzania’s Tanga and Tanzania Portland Cement (producer of Twiga cement) — have already made their intentions of multi-billion shilling expansions known.
 
While some of the projects are near completion, others are in the process of being commissioned.
 
The firms are targeting the growing demand for cement in the region, buoyed by economic expansion even as countries invest to resuscitate growth which has stalled as a result of the ongoing global recession.
 
The rapid growth of Kenya, Uganda and Tanzania in the last five years has spurred rapid development in the construction industry and infrastructural projects.
 
Kenya’s economy fared badly in during the global financial crisis, declining to 1.7 per cent in 2009 from 7.1 per cent in 2008.
 
It’s projected to recover and grow by 2.5 per cent this year.
 
Both Uganda and Tanzania have managed to weather the crisis much better.
 
Uganda grew 9.5 per cent in 2009 from 8.6 per cent in 2008 and is expected to record a relatively robust growth of 6.2 per cent this year.
 
The main driver of its economy is likely to be the discovery of oil which will spur other economic activities especially construction.