Cement consumption in Kenya fall in first half of 2017

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Cement consumption in Kenya fall in first half of 2017

Data from Kenya National Bureau of Statistics (KNBS) reveals that Cement consumption in Kenya fell by 62,000 metric tonnes in the first five months of 2017.

The report projects a possibility of first annual decline in consumption in more than a decade.

Cement consumption stood at 2.5 million metric tonnes in the five months to May compared to 2.56 million in a similar period last year.

Manufacturers also cut back on production in the first half of the year, from 3.31 million metric tonnes to 3.18 million.

Read More:Cement firms in Cameroon on massive expansion

A fall in cement consumption in Kenya depicts a slowing construction industry in the country that has been booming in recent years. The construction sector was especially affected  by the decline in private sector credit growth to 2.1 per cent in May.

Also hitting cement consumption in Kenya is the completion of the first phase of the standard gauge railway. But producers are optimistic that cement uptake will pick again when the second phase of the SGR running from Nairobi to Naivasha begins.

East Africa’s installed cement capacity is currently estimated at 15.6 million tonnes, with 8.6 million tonnes of that figure produced in Kenya. Tanzania, Uganda and Rwanda have 4.9, 1.95 and 0.15 million tonnes of cement capacity respectively.

Despite the headwinds facing countries that are dependent on commodity exports, investors remain bullish over African cement markets, attracted by ongoing strong real GDP growth, forecast to average 4.5% in 2015, rising purchasing power and development of numerous infrastructure and housing projects.

Read More:Top cement manufacturers in East Africa

An Ecobank Report of 2016 indicated that cement demand in East Africa is set to grow so expansion of current manufacturing capacity is likely. This could result in a major boost for foreign suppliers of cement making equipment and machinery.

But stiff competition in the Kenyan market has kept cement prices flat, a move that has seen companies turn their focus to new products such as ready mix and high-strength varieties used in mega projects.