Kenyan cement firms want protection from surging imports

21st February 2020

By: John Muchira

Creamer Media Correspondent


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Cement manufacturers in Kenya are pushing for tough interventions by government to stem the influx of imports, which are threatening the competitiveness of local producers.

National Cement Company chairperson Narendra Raval said this month that Kenya had enough clinker to meet local demand and called on government to impose a hefty tariff of 25% – or even a total ban – on clinker imports.

“This will protect the local industry from competition, create more jobs for Kenyans and save the country billions of shillings in foreign exchange annually,” he said.

Although Kenya has an oversupply of clinker, with a production capacity of 7.5-million tons a year, compared with demand of four-million tons, the country imports about two-million tons every year, costing the country more than $100-million in foreign exchange.

The influx of imports has resulted in Athi River Mining (ARM) collapsing and East Africa Portland Cement Company plunging into technical insolvency, while Bamburi Cement is experiencing a decline in profitability.

ARM was put under administration in August 2018, owing to massive debt amounting to more than $190-million. Devki Group, the owner of National Cement, has since acquired the company for $50-million.

Bamburi Cement, another major player in Kenya's cement manufacturing industry, posted a 72% decline in profits to $3-million in the six months to June 2018, down from $12-million in the corresponding period of the previous year.

Cement consumption in Kenya has been on the decline in recent years, falling from 5.7-million tons in 2017 to 5.4-million tons in 2018.

According to Raval, imposing restrictions on imports will help government achieve its agenda to revive the manufacturing sector.

“Taming clinker imports will reduce cement prices and encourage more Kenyans to build affordable houses,” he said.

National Cement is among the manufacturers that have been on an expansion drive and has invested in clinker production facilities with a combined capacity of 3.5-million tons a year.

In January, the company commissioned a $60-million plant with a nameplate capacity of 750 000 t/y.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor



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