Housing hit by high cement prices in Kenya

Housing hit by high cement prices in Kenya
Published: 13 October 2006

Rising cement costs are pushing up the cost of housing, the Architectural Association of Kenya (AAK) said yesterday.

At the same time, labour costs have also shot up, with wages having risen to 8.4 per cent of total costs last year, up from six per cent in 2004.

The association now wants the Government to intervene.

Speaking at a press conference in Nairobi yesterday, during the opening of the fourth Home Expo at the Kenyatta International Conference Centre , AAK chairman Mohammed Munyanya expressed concern that if allowed to escalate, the prices may soon get out of hand.

"Just like oil, the Government may find it hard to bring down the price of cement once it hits the roof, which could be very soon," he said.

He asked the Government to do more to lower oil prices. Energy accounts for as much as 45 per cent of cement production costs. Bamburi Cement and Athi River Mining Company use coal, while East Africa Portland Cement Company use fuel oil. Cement prices have been on the increase over the last four years, with the firms blaming it on energy costs.

In 2004, the prices went up twice, and have been rising since.

The 2006 Economic Survey shows that the cement industry grew by 10.9 per cent last year. The sector, which has an estimated installed capacity of two million tonnes, cranked out 1.57Mt of cement last year, and 1.4Mt in 2004.

This year’s Kenya Homes Expo has up to 110 stalls and over 80 exhibitors, ranging from financiers to interior designers among others.

There will also be exhibitions of decent and affordable housing costing as low as Sh.1.2m per unit.

"If the government is able to put a tab on the cost of cement and improve infrastructure, we could showcase property as cheap as Sh600,000 next year," said the event’s director, Ellie Ongoma.