This archive report was first published on 14 May 2020.
Kenya's cement industry is facing a tough year due to the COVID-19 pandemic, which has led to a significant decline in demand for cement.
According to Bamburi Cement, which commissioned an additional 0.9 million-tonne grinding capacity per year, its finance costs rose to Sh436 million last year from Sh258 million in 2018.
The increase in finance costs was largely due to the Sh2 billion long-term debt acquired by its Uganda subsidiary Hima Cement Limited (HCL) in mid-2018 to finance the HCL's capacity expansion project.
Bamburi chairman John Simba expressed concerns that the pandemic has redirected investment towards fighting the virus, forcing the company to reassess its outlook.
“Post-Covid-19, with government expenditure, refocused towards the war on Covid-19, we will need to reassess the market and the general economic situation,” he said.
Devki Group's National Cement Company is also facing challenges, with a 30 percent drop in demand due to the pandemic.
“We have seen a big drop in demand up to 30 percent because those who have finished projects do not want to start new ones. Profits are down and it is challenging. But there is nothing we can do because it is a global challenge and it is not just us,” said Devki Group founder Narendra Raval.
