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Dangote pushes back Kenya entry

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World Cement,

Dangote Cement appears to have pushed back plans to enter the Kenyan markets. In its latest annual report, the company said that is hoped to be operational with two plants in the East African country by 2020/2021, A year previous, the company had said it expected to open production in Kenya in 2019.

According to the company’s latest annual report, Kenya is “high on our priorities”, with two plants planned of 1.5 million tpy capacity each. The plants will be located near to demand centres in Nairobi, the country’s capital, and Monbasa.

Despite the delay in establishing production facilities in the country, Dangote did enter the market last year with imports from its Mugher plant in Ethiopia, the company said in a July 2016 trading update. Prices were reported to be US$74 per tonne in June 2016 – significantly undercutting prices for local cement.

The company reiterated the potential for imports into Kenya in its latest annual report, saying it has “experienced some interest from cement importers” in the country.

Cement demand in Kenya weakened in 2016, while capacity in the sector continues to increase – prompting warnings of idle capacity. According to Dyer & Blair Investment Bank, plant utilisation rates could fall to 45.4% in 2018 from 61.7% now, if the sector continues to see expansion.

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