Cement demand hits monthly peak

Increased activity in Kenya’s property market in recent years has pushed up cement production to about 400,000 metric tons per month.
 
In January 2012, the country’s cement production stood at approximately 300,000 metric tons (MT) per month but rose to 373,916 in October, the highest in Kenya’s history.
 
The country’s cement production has been on a steady rise in the past 12 months, Kenya National Bureau Statistics (KNBS) data shows.
 
It further indicates that Kenya’s cement consumption has been on an upward trend from January 2012, with the country currently consuming an average of 300,000 MT of cement per month.
 
The data indicates that cement production in January last year, the country’s cement processors, among them East African Portland Cement Company and Athi River Mining, produced 318,000 MT of cement. This rose to 345,000 MT in February and 360,000 MT in August, having maintained a stable rise in subsequent months.
 
The rise in production is attributed to increased demand for cement in the construction industry as Kenya experiences boom in the real estate sector.
 
According Old Mutual analysts, the huge deficit in infrastructure, especially housing, commercial buildings, presents a significant case for continuing growth in cement consumption in Kenya and across the East African region.
 
Coupled with a ballooning urban population and increasing middle class group, the demand for housing is set to remain elevated in turn
 
“Suburbs of Nairobi and Mombasa have in the last 10 years witnessed phenomenal housing development that have surged demand for building materials including cement. Urbanisation levels in Kenya, Tanzania, and Uganda are low at 32 per cent, 26 per cent and 15 per cent respectively, with expectations that the urbanisation rate will hit 50 per cent in Kenya by 2030. Kenya has a massive housing deficit, with annual demand at 200,000 units per year against a supply of 50,000 units,” analysts at Old Mutual said in a report released in November 2012.
 
The cement production and consumption boom has been consistent in Kenya since 2011. That year, production hit 4 million metric tons while consumption stood at 3.4 million metric tons.
 
The industry has also seen entry of new players and increased production capacity in Kenya and in the East African region. Savannah became the latest entrant in the Kenyan market, with an estimated annual production capacity of 1.5 million MT.
 
Other players in the market include Bamburi Cement, Athi River Mining, East African Portland Cement Company, Devki Steel Mills Ltd’s National Cement, Aero-Technology International Engineering Company of China and Mombasa Cement.
 
Over the last five years, industry players have invested over Sh42.5 billion ($500 million) in capacity expansion. The cement grinding capacity in the region has also increased by 65.8 per cent over the last five years to 10.4 million tons per annum (mtpa). This is set to increase by 41.8 per cent to 14.76mtpa by 2015.
 
In 2010, production was 3.7 million MT while consumption stood at 3.1 million MT. The thriving of the real estate sector has not positively influenced only the cement industry, production of galvanised iron sheets, which are used in roofing in Kenya has also risen tremendously.
 

Kenya currently produces an average of 20,000 MT of galvanised iron sheets per month, thanks to the vibrant construction sector. 

Source : abdas.org

Posted on : 30 Nov,-0001

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