This archive report was first published on 10 September 2019.
Kenya's cement industry is on the cusp of a capacity crisis, according to a recent report by local brokerage firm AIB Capital.
Published on September 10, 2019, the report highlights the planned expansion of production by four major cement manufacturers, which is expected to increase production to 18.1 million metric tonnes from the current 13.1 million.
However, local consumption remains stagnant at 45 per cent of the current production, while distribution to neighboring countries Uganda and Tanzania is declining. This trend suggests that the new expansion will lead to overcapacity in the industry.
“Presently, four of the major cement manufacturers are planning to expand and double their capacities from 2019,” the report notes.
“… the consumption level being low at six million metric tonnes accounting for only 45 per cent of the total capacity and cement distribution to Uganda and Tanzania declining, overcapacity of cement is unavoidable,” the report warns.
The report's findings have significant implications for the cement industry in Kenya, and it remains to be seen how the major manufacturers will address this issue.
