Kenya: cement consumption falls 5.3% in 3Q16

The growth in cement consumption fell by 5.3 per cent in the third quarter of 2016 compared to 3Q15, according to a report from the Kenya National Bureau of Statistics (KNBS).

The KNBS data shows that the domestic market consumed 1.52Mt of cement in the three months to September 2016, compared to 1.45Mt in the same period in 3Q15 and 1.3Mt in 3Q14.

The decline in cement demand was in line with a general slowdown in the construction sector. Lower demand from major infrastructure projects contributed strongly to the drop in Kenya's cement consumption.

“The construction sector grew by 9.3 per cent in the third quarter of 2016 compared to 15.6 per cent growth in the same quarter of 2015. The slowed growth was mirrored in the consumption of cement that decelerated from 11 per cent in the third quarter of 2015 to 5.3 per cent in the third quarter of 2016,” said KNBS.

Cement production similarly contracted in the 3Q16 compared to 3Q15, slipping to 1.61Mt from 1.69Mt a year earlier, noted Kenya's Business Daily.

With more infrastructure projects in the pipeline, such as the second and third phases of the SGR and the Lamu South Sudan Ethiopia Transport (Lapsset) corridor construction, some cement companies have announced plans to expand capacity in anticipation of future demand.

Bamburi Cement, the largest local producer, plans to increase the capacity at its Athi River plant to 2.3Mta from 1.5Mta, with Savannah Cement planning a similar installation at its plant in Athi River, taking capacity to 2.4Mta from 1.5Mta.