Displaying items by tag: Kenya

East African: Kenya-based East African Portland Cement Company (EAPCC) has announced plans for an international expansion into the Democratic Republic of Congo. The planned expansion will accompany continued capital expenditure investment in the company’s existing Athi River cement plant in Kenya over the five-year period up to 2028.

CEO Oliver Kirubai said that EAPCC expects ultimately to ‘outgrow the regional cement market.’

Kenya: The Supreme Court of Kenya has ordered lenders Absa Bank and KCB Group to not seize Savannah Cement's assets or appoint administrators or receivers for it after the producer defaulted on its debts. The producer's debts include US$2.41m in interest and US$110,000 in penalties. The temporary block will stand until the court issues further directions. Business Daily News has reported that the court has ordered Savannah Cement to pay US$81,200 to Absa Bank by 28 December 2022.

Savannah Cement director Benson Sande Ndete alleged that lenders coerced the company into repaying US$40.6m-worth of debt. The law forbids interest payments greater than the principal sum of a loan.

Ndete said, "The firm is working to complete the funding of its Kitui clinker plant project, which will allow it to get all the funds necessary to clear the debts."

Kenya: Savannah Cement has hired China-based Sinoma International Engineering for construction of its upcoming 2.92Mt/yr Kitui clinker plant in Eastern Province. The plant will additionally have a 900,000t/yr grinding unit, a 35MW fossil fuel-fired captive power plant and a 13MW waste heat recovery (WHR) system. Savannah Cement chair Benson Ndeta said that the plant will convert to 100% solar and WHR-powered production by the end of 2029.

Sinoma International Engineering plans to commence the project immediately, and to complete it in late 2024.

Kenya: Savannah Cement has ordered a new US$300m production line from China-based Sinoma international Engineering for its Kitui plant. The project scope covers supplying an integrated clinker production line from limestone crushing to cement packaging and logistics. The line will have a clinker production capacity of 8000t/day. Commissioning of the new line is scheduled for about two years after the contract takes effect.

Kenya: Bamburi Cement says that it expects its full-year earnings before interest, taxation, depreciation and amortisation (EBITDA) to fall by 25% or more year-on-year during 2022. The Kenyan Wall Street newspaper has reported that the producer attributed the anticipated decline to increased energy costs and reduced cement demand.

During 2021, Bamburi Cement recorded a turnover of US$338m and a profit for the period of US$11.3m.

Kenya: East African Portland Cement (EAPCC) has launched a sustainable cement product called Green Triangle Cement. Trade and Investments Cabinet Secretary Moses Kuria attended the official launch for the product, according to the Business daily newspaper. The product is a new masonry cement suited for mortar works. It is produced using less clinker. It is certified under the 22.5 standard via the Kenya Bureau of Standards but the company says it has been ‘boosted’ to 28 strength for a wider range of applications. The EAPCC is currently aiming to increase its range of cements to five brands.

Denmark: Switzerland-based Holcim has made an investment in 3D concrete printer supplier COBOD International. Holcim hopes that the investment will help it to further expand its TectorPrint 3D printing ink range. Holcim and COBOD International's collaboration dates to 2019, since which time the partners have 3D printed windmill tower bases in Denmark, a school in Malawi and a housing development in Kenya.

Holcim's head of global research and development Edelio Bermejo said “At Holcim, we are continuously expanding our range of building solutions to build better with less, working to improve living standards for all in a sustainable way. 3D concrete printing will help us meet these goals."

Nigerian billionaire Aliko Dangote was spotted attending the inauguration ceremony of Kenyan President William Ruto earlier in September 2022. This is relevant because Dangote’s cement company previously announced plans in 2016 to build two 1.5Mt/yr plants in Kenya, near Nairobi and Mombasa respectively. They were intended to become operational by 2021. Unfortunately, Dangote himself allegedly described Kenya as being more corrupt than Nigeria to Kenyan broadcast journalist Jeff Koinange a few years later and nothing more happened. Back in 2014 Ruto visited Dangote Cement’s Obajana plant in Kogi state in Nigeria when the politician was the Deputy President of Kenya. Dangote’s attendance at the presidential inauguration this month suggests at the very least that his relationship with Ruto remains active. Maybe more news on those planned plants will follow.

Graph 1: Cement in Kenya, 2018 – June 2022. Source: Kenya National Bureau of Statistics (KNBS).

The reason why the owner of Africa’s largest cement company might be interested in the Kenyan market can be seen in its latest cement production figures. Data from the Kenya National Bureau of Statistics (KNBS) shows that production for the first half of 2022 grew by 20% year-on-year to 4.95Mt in the first half of 2022, from 4.12Mt in the same period in 2021. Cement production was broadly similar in 2018 and 2019 at around 6Mt. It then increased by 25% to 9.25Mt in 2021 from 7.41Mt in 2020. On a rolling annual basis, production picked up at the start of 2020 and has risen consistently since then each month, peaking at over 10Mt in May 2022.

However, the elections in August 2022 probably slowed this growth trend, despite being much more peaceful than those in 2007, although the KNBS is yet to release the data. Bamburi Cement said in its outlook for the second half of 2022 that it expected markets to recover after the ballot. The subsidiary of Holcim reported increasing turnover in the first half of 2022, due to mounting sales volumes and price rises, but its profit fell sharply. It blamed this on fuel and logistics inflation, growing clinker import costs as well as negative currency exchange effects.

That last point about imported clinker is worth noting given that a government report in late 2021 found that the country had a clinker shortage of up to 3.3Mt/yr. Yet, the KNBS data in recent years shows that cement production and consumption are broadly similar, suggesting that the shortfall in clinker is being imported. The report added that 59% of the imported clinker originated from Egypt, tariff free, due to a free trade agreement. Local producers were reported to have been operating at a 65% capacity utilisation rate. Egypt and the UAE accounted for most of the imported clinker followed by Saudi Arabia. An interview in the Standard newspaper at this time with Bamburi Cement’s managing director Seddiq Hassani revealed that, despite locally produced clinker being cheaper than imported clinker, some producers were reluctant to hand control of a key input material over to their local competitors. Other producers, predictably, were trying to persuade the government to raise the duty on imports of clinker from 10% to 25%. Tariff discussions have continued in 2022.

So far in 2022 the other big stories in the sector have included Bamburi Cement’s plans to build two solar power plants and a major repair to the kiln shell at East Africa Portland Cement’s (EAPCC) Athi River cement plant. The solar plants will be built next to Bamburi Cement’s integrated Mombasa plant and its Nairobi grinding plant. Once operational in 2023 they are anticipated to supply up to 40% of the cement producer’s total power supply. Devki Group, the owner of National Cement, also announced plans in August 2022 to set up a wind farm near Mombasa. However, this seems more like an attempt to diversify the group into electricity production rather than to supply its own plant near Nairobi. EAPCC’s upgrade project has completed this week after about a month and half of work. It is intended to increase the plant’s cement production by 50%.

Cement production started in rise in 2020 but the Covid-19 pandemic may have constrained this. Production (and consumption) then jumped up in 2021 and looks set to do similar in 2022 bar a possible blip from the elections in August 2022. This is despite the global market issues arising from the end of Covid-19 and the war in Ukraine. These may be uncertain times but the fundamentals for the Kenyan cement market look positive despite rising end prices. Unsurprisingly, it looks likely that Dangote Cement remains keen to extend its business to Kenya.

Kenya: East African Portland Cement Company has resumed production at its 0.6Mt/yr Athi River cement plant. The producer successfully replaced the shell of the plant’s kiln. Managing director Oliver Kirubai said that the upgrade will enable the plant to increase its cement production by 50%, and reduce the price of its Blue Triangle brand cement.

Kenya: Bamburi Cement’s turnover rose by 3% year-on-year to US$168m in the first half of 2022 from US$164m in the same period of 2012. However, its profit before tax tumbled by 89% to US$1.03m from US$9.25m. The subsidiary of Switzerland-based Holcim attributed its rising turnover to mounting sales volumes and rising prices. However, it blamed its falling profit on “significant inflation of the fuel prices, logistics costs and imported clinker prices in both Kenya and Uganda.” It added that it expected the local market to improve after the Kenyan general election in August 2022 and growth in infrastructure spending in Uganda propped up by the oil industry.