Cement prices are expected to fall further, a reprieve to Kenyans building their houses, thanks to Bamburi Cement’s plan to expand its Nairobi processing plant, bringing more to already oversupplied market.
The Sh902 million expansion plans by Bamburi comes just two month after Nigeria’s Dangote Cement shook the local market with cheap imports from a plant in Ethopia even as he prepares to establish a local manufacturing plant.
Currently, the average retail price of a 50kg bag of cement is Sh650, down from Sh750 a year ago.
Bamburi Cement’s expansion will see it increase its annual production by a whopping 50 percent, from the current 1.15 million metric tonnes to 2.3 million per year.
Although claims that its expansion is driven by the growing market for cement, occasioned by massive infrastructure developments in the country, analysts believes that the company is accustoming to maximum supply trend in the market.
‘’The construction of humongous development projects like the standard gauge railway and road bypasses requires readily available construction materials in large quantities,’’
the firm noted in the press release to news houses.
The supply strategy by Bamburi follows another on by Athi River Mining (ARM) which is expected to start construction of a plant in Kitui to produce 8,000 tonnes daily to counter Dangote Cement which is planning to erect Sh34.4 billion manufacturing plant in the same area.
According to a recent cement outlook by the Standard Investment Bank (SIB), Kenya is soon to experience intense market rivalry that will be beneficial to constructors.
It however expressed fears that rivalry may compromise quality, urging consumers to be extremely careful.
Other players in the market include-National Cement, a subsidiary of Devki Group, East Africa Portland Company, Mombasa Cement and Savannah
The cat fight being witnessed in the country’s cement sector, coupled with low lending rates by banks is expected to stir up activities in Kenya’s real estate sector, hence more affordable houses.
This will go a long way in addressing a huge house deficit in the country, with the housing ministry estimating an annual housing deficit of 200,000 units in urban centres, with only 50,000 units erected every year.