Bamburi Cement acts to protect market share

Kenyan cement production capacity is now estimated at 12Mt, according to industry leaders, while annual demand ranges between 5-6Mta. Cement prices are below levels recorded more than a decade ago, yet power prices have either climbed or remained flat. However, it has not stopped Bamburi Cement from trying to expand.

Bamburi Cement (LafargeHolcim group) unveiled a KES3.5bn (US$33.9m) grinding plant at its Athi River facility in 2018 among other capacity enhancements, said managing director Hassani Seddiq. Bamburi's decision on additional investment was informed by the need to protect its market share, which has been eroded by newer entrants, thanks to their higher plant efficiencies. Bamburi's share of the market has shrunk to about 32 per cent from a high of 60 per cent when its only competitor was East African Portland Cement Co.

"If we continue with this trend, then I think the industry is not sustainable anymore. Prices are falling while costs are rising," Mr Seddiq said.

Seddiq said the focus is now on cutting costs, with plans to haul bulky inputs, including clinker, from the coast through the old railway line. He estimates this could help slash transport costs by up to 30 per cent.