This archive report was first published on 21 October 2019.
On October 21, 2019, Bamburi Cement predicted a further drop in cement demand for the remainder of the year.
The company cited a slowdown in government projects and a credit squeeze as the main reasons for the decline.
Bamburi Managing Director Seddiq Hassani stated that despite expectations of a recovery, the market had remained flat, with annual consumption potentially falling for the third consecutive year.
According to Mr. Hassani, the market was expected to be below 5.8 million metric tonnes, a decline of two percent from the previous year.
He attributed the decline in consumption to reduced infrastructure activity due to rising debt and a drop in real estate projects, as borrowers struggled to access loans.
Mr. Hassani also pointed out that some government projects had been cancelled, postponed, or scaled down, having a psychological impact on individual home projects and limiting credit availability.
Declining cement prices, which the industry used to woo new customers in an environment of rising electricity and fuel costs, further exacerbated the situation.
Statistics from the Kenya National Bureau of Statistics showed that cement production decreased by 2.4 percent, while consumption grew marginally by 0.18 percent in the first half of 2019.
Kenya's cement manufacturers, including Bamburi, ARM Cement, Mombasa Cement, East African Portland Cement, Savannah Cement, and National Cement, had increased their capacity despite falling consumption.
However, the total capacity stood at 13.2 million metric tonnes, with a production utilisation rate of 46 percent in 2018, compared to 69 percent in 2016.
