Kenyan producers to cut cement prices

Cement companies intend to lower their prices and achieve regional competitiveness following the reduction in local off-peak power prices. President Uhuru Kenyatta's directive issued last Tuesday took effect at midnight (1 December). Under the directive, manufacturers will have their electricity consumption during the low peak period between 22-06h period halved.

Savannah and National Cement brand makers said they have seen demand for local cement rising following the local price drops. Speaking to the press separately, Savannah Cement Managing Director, Ronald Ndegwa, said the 50 per cent power charge reduction between 22-06h would unlock money that could be spent in improving operations hence boosting sales. 

"That is money straight into our pockets as we spend between KES40m (US$0.38m) and KES50m (US$0.49m) a month. We operate 24 hours a day and such a move will positively impact on our customers," he said during the firm's five-year celebrations at its Kitengela-based plant.

Mr Ndegwa said the cut amounted to nearly a quarter of the cement maker's current power charges which gave the company an opportunity to relook at its investments.

He said its 1.2Mta plant will produce cement for road-building projects was still under construction and is slated for completion late next year.

Cement maker Devki Group's Raval Narendra also said Kenya’s cement would now be more competitively priced locally and at the regional level. "Kenya’s image as an investment destination will improve since its power prices are coming down. It is easier now to determine lower prices since our profit margins allow it," he said.