Construction boosts Kenyan cement demand

Construction boosts Kenyan cement demand
08 July 2014

In May, cement consumption in the Kenya rose to 450,379t in May, up from 426,523t in April and continuing the upward trend noted since March when demand stood at 387,266t, according to the Kenya National Bureau of Statistics (KNBS). Since the start of the year Kenya has consumed over 2Mt of cement, according to the government agency’s Leading Economic Indicators report.

When compared with May 2012, demand in May 2013 increased by 140,878Mt, suggesting an ongoing rise in demand this year. The East African nation consumed 4.3Mt of cement last year, up from 3.9Mt in 2012.

While growth in the construction market decelerated from 7.4 per cent YoY to 4.9 per cent, the KNBS said in its 1Q14 analysis that "The growth in the sector was reflected in cement consumption which expanded by 17.2 per cent," said KNBS in an economic analysis for the first quarter.

Kenya’s construction sector has expanded rapidly as developers put up structures for both private and commercial use. In the capital Nairobi, the city centre skyline has changed dramatically as old buildings are replaced with skyscrapers, some going up to 30 floors. In city suburbs bungalows and maisonettes are replaced by multistorey buildings and in other parts of Kenya, there is intensive residential and commercial development.

In the first five months of the year, Kenya produced 2.3Mt of cement, up from 1.9Mt and 1.8Mt during the equivalent period in 2013 and 2012, respectively. Manufacturing has increased on the back of  demand surges, with the country producing an extra 60,000tpm of cement when compared to a year ago. Output now stands at more than 470,000tpm.

There are five cement companies in Kenya, namely Bamburi Ltd, Rhino, East African Portland, ARM and Savanna Cement. Bamburi and East African Portland are the largest producers, commanding more than half of the market share. Rhino and Savannah are new entrants, aiming to capture a share of the expanding market. As cement consumption continues to increase, more players are expected to enter the market, including Dangote Cement, owned by Nigeria's Aliko Dangote.

Published under Cement News