Kenya’s cement sector is undergoing rapid transformation following two major ownership changes this month. Savannah Cement has been rescued from bankruptcy by a consortium of local flour millers, while Kalahari Cement has secured approval to acquire a significant stake in East African Portland Cement (EAPC).

Mombasa Maize, Kitui Flour Millers and Eldoret Grains paid around US$29.4m to acquire Savannah Cement and its 2.4Mta Athi River plant. The deal gives the troubled producer a second chance in a domestic market with total capacity of about 16Mta, according to the Global Cement Report™ Plant Database.

Meanwhile, Kalahari Cement, a newly incorporated Kenyan investment company linked to Tanzania’s Amsons Group, has acquired a 29.2 per cent shareholding in EAPC for KES718.7m (US$5.57m). The deal, cleared by the Capital Markets Authority on 5 August, strengthens the influence of businessman Edhah Abdallah Munif, who also controls Bamburi Cement shares in EAPC. Once the transaction is completed, Mr Munif will hold a leading 41.7 per cent stake in EAPC.

The Amsons Group has already reshaped the market by acquiring Bamburi Cement Industries, first with a 58.6 per cent stake in July 2024, followed by full control in December. Bamburi operates plants in Athi River (2.4Mta) and Mombasa (1.1Mta).

Challenges for new owners
Despite the fresh investment, Savannah Cement faces a challenging environment. Domestic cement prices have risen sharply, driven by higher global costs of coal, power and raw materials. In Nairobi, a 50kg bag now sells at about KES750 (US$5.80/bag). Simba Cement’s 32.5 grade retails at KES735, while EAPC prices have climbed to KES755, Mombasa Cement to KES750, and Bamburi to KES780 per bag.

Greater product traceability is demanded
Cement producers were warned at the start of the year that they must buy raw materials from licensed sources as the illegal mining trade for commodities like gypsum was losing the government taxes. However, the halting of gypsum mining in Kenya had been driving costs up for local cement producers that had been relying on imports, despite the 25 per cent import duty. “Kenya’s restriction on coal extraction also has meant that we reply on imports of the same. This coupled by a 2.4 per cent excise duty imposed on imported coal, has only served to hurt the industry further,” said Mr Tobias Alando, CEO of the Kenya Association of Manufacturers.

However, Managing Director for the Kenya Bureau of Statistics, Esther Ngari said: “Manufacturers have to step up their product traceability, as it remains their responsibility. Issues of repackaging and compromising the quality of cement are on the rise and it is the manufacturers’ responsibility to ensure even what is stocked by local dealers is up to standard.”

Market outlook
The market outlook remains uncertain. Kenya’s cement consumption fell by 7.2 per cent in 2024 to 8.54Mt, according to the Kenya National Bureau of Statistics, while imports rose 16.1 per cent to 39,700t. Much of the sector’s future growth will depend on a revival of government housing projects, which saw spending plunge from KES11bn in 2023 to just KES4bn last year.