News from East Africa

In an article entitled ‘Cement Makers Sharpen Spears for Renewed Market Share Battle,’ published this week in Business Daily in Nairobi, Kenya, mention is made of five cement manufacturers across the region who have already indicated their intentions to expand their production capacities. The companies are: Kenya’s Athi River Mining, Toro Cement (trading as Mombasa Cement in Kenya), and Hima (Lafarge) in Uganda, as well as Tanzania’s Tanga and Tanzania Portland Cement. Some of the projects are nearing completion, while others are in the process of being commissioned. The companies are looking to meet the growing demand for cement in the region, which is being buoyed by economic expansion, even as countries invest to resuscitate growth, which has stalled as a result of the global recession.

Kenya’s economy declined during the financial crisis to 1.7% in 2009 from 7.1% in 2008. It is projected to recover to 2.5% this year. It seems that Uganda and Tanzania managed to weather the crisis much better. Uganda grew 9.5% in 2009 and is expected to record a robust growth of 6.2% this year. The main driver of the country’s economy is the discovery of oil, which will spur other economic activities especially construction. Although Tanzania has had a buoyant economy where it grew 7.5% in 2009, it is expected to contract to 5% this year.

With the implementation of the EAC common market protocol in January of this year, it is expected that these countries will boost their infrastructure spend as they seek to improve the flow of trade and the business environment.

A research note issued by Sterling Investment Bank states, “All the cement companies in East Africa have a combined capacity of about 5.2 million tpa, while forecasts indicate the whole region would require 11 million t to meet demand that is growing at an annual rate of 6%.”

In recent years impressive economic growth has led to heavy reliance on cement imports. That said, analysts are predicting that the increased capacities, mentioned earlier, could flood the market, thereby setting off price wars.

Read the article online at: https://www.worldcement.com/africa-middle-east/25032010/news_from_east_africa/