Kenya's cement market is now being supplied with cement from a new source as Dangote has started exports from its 2.5Mta Ethiopian plant to the east African country.
Industry sources said the majority of the exports are destined for road construction projects in the north of Kenya.
The step is expected to drive down prices in a market that has seen virtually no price changes in the past decade. Dangote said that the cement exported to Kenya is priced at around KES7400 (US$74)/t or up to 40 per cent below the price charged by domestic cement producers.
The entry of the Nigeria-based cement maker into the Kenya market heralds a prelude to the company gaining a firmer foothold with a 3Mta local cement plant in 2019. When commissioned, the company is expected to replicate its strategy applied to the Tanzania market.
Earlier this year, Dangote started selling cement in Tanzania following the completion of its cement plant in Mtwara, some 400km from the capital, Dar es Salaam. The company cut prices of cement, rapidly gaining market share at the expense of local competition. It is reported that cement prices in Tanzania fell by nearly a third since the entry of Dangote into the market. In June Dangote cement sold for around US$80/t, some 20 per cent less than competitors. "We estimate that in June we achieved 23 per cent market share across Tanzania and were the leading supplier of cement in the key market of Dar es Salaam," Dangote said.
