Kenya’s biggest cement maker, Bamburi Cement, expects consumption in east Africa to grow 12 per cent this year thanks to road projects and individual home-building, its managing director said on Wednesday.
Bamburi, majority owned by Lafarge, the world’s biggest building materials group, forecast in February the market would be resilient during the global economic downturn.
"Cement consumption in east Africa is still growing. The growth is slightly below the expectation but it is still growth. We were expecting it to remain 15 per cent, but we see about 12 per cent," Hussein Mansi told reporters.
Analysts say they use cement consumption, among other indicators, as a yardstick of the economic strength in many Africa countries where official data can be haphazard.
The managing director said cement consumption in 2008 was 2.4Mt in Kenya, 1.2Mt in Uganda and 1.5Mt in Tanzania.
Mansi said the industry was facing stiff competition from cheaper imports from countries like Pakistan, India, China and Malaysia.
"It is very possible that the local producers will lose market share to some adventurous importers coming from here and there," Mansi told Reuters, citing neighbouring Tanzania, where cement plants have cut output and sent workers on leave.
"In Kenya, we are not yet at this point but we do not have to wait till it happens."
He said Bamburi’s capacity expansion in Uganda, where it plans to add 480,000tpa to reduce the country’s dependence on imported clinker and cement, is on course.
The additional output will also help the firm start exporting cement to central Africa to tap new markets, he said.
"Emerging markets have not reached an acceptable level of development yet, so they keep building," he said.
Bamburi is also looking to expand its special products business to become the No.1 producer of ready-mix concrete blocks in East Africa, said the managing director.
Kenya, Uganda, Tanzania and Rwanda all unveiled a boost in spending on infrastructure projects this month in their annual budgets to maintain growth in the face of the economic slowdown.