The government’s thirst for infrastructure projects has sparked price and quality wars among cement manufactures.
Devki Group chairperson Narendra Raval attributed the war to increasing inflow of substandard cement from regional firms.The group owns National Cement which produces Simba Cement. It controls 20 per cent of the market.
“Those importing to Kenya are not monitored. Their cement is substandard and below the normal 50 kilogrammes. This is killing the local industry,” Raval said. He questioned why the Kenya Bureau of Statistics and Kenya Association of Manufacturers is not taking action on the regional manufacturers.
“Most buildings are falling because they were constructed using substandard cement and Kebs is to blame for not effectively monitoring the price wars,” Raval said.
price drop
Distributors at Industrial area said they are now selling a 50kg bag at between Sh600 and Sh650, down from Sh770 two years ago.
They said the low prices are raising fears of increased low quality cement entering the market among some builders. The prices per bag for distributors now retail between Sh500 and Sh650 for distributors and about Sh550 and Sh700 for retailers.
Raval said the entry of new players such as Dangote Cement is a big cause for worry since they sell cement at a much cheaper price than other East African manufacturers.
Currently, Dangote cement, which is imported, retails at Sh7,500 per tonne in Northern Kenya compared to Sh11,000 from Kenyan manufacturers, a 31.8 per cent difference. The firm intends to commission their plant in Kenya in the year 2023.
Some of the projects eyed by the cement manufacturers include the one million housing project by the government which is among the recently announced Big Four agenda. The standard gauge railway project that is expected to connect Mombasa to Malaba on the border of Uganda and the Lapsset corridor among others.
To fill this gap, cement maker Lafarge group, which owns Bamburi Cement, intends to increase its capacity to 1.8 million tonnes by mid this year. The projects have also seen a rising appetite of new cement makers both locally and internationally setting base in Kenya.
The Star found out there are currently two cement firms namely Cemtech and Unicem that are under construction in different parts of Rift valley region and are banking on the government projects to boost their growth.