A decision by Kenya's ministry of Mining to impose a levy on cement manufacturers is likely to see cement prices rise by KES10/50kg bag next week.

“This new levy is a result of a negotiated settlement between the Government and cement makers for purposes of creating a level playing field between those who import finished products and those who have clinker,” said Pradeep Paurana, Chief Executive Officer, Athi River Mining (ARM) told local news.

The new 1.5 per cent per tonne levy for the cement industry comes at a time when prices have been on a decline for months. “Prices have been falling mainly due to oversupply in the market due to excess capacity in the industry,” said Paurana. The list of recent entries in the industry includes National Cement, Mombasa Cement and Savannah Cement.

Latest data from Kenya National Bureau of Statistics (KNBS) indicates that the quantity of cement produced rose from 414,807t in September 2013 to 425,058t in October 2013. Meanwhile consumption rose from 342,537t to 344,614t over the same timeframe.