Displaying items by tag: Kenya
New MD at Bamburi Cement
14 February 2018Kenya: Bamburi Cement has announced the appointment of Seddiq Hassani as the new managing director of the company. Hassani will replace Eric Kironde who has been acting Managing Director and Finance Director for the past four months. Hassani joins Bamburi Cement from LafargeHolcim’s Middle East and Africa Region where he was the Head of Growth and Innovation since September 2015, based in Paris, France.
“We are confident that with his strong and wide experience in operational and functional positions, more specifically, in leading transformation and managing growth strategies at both country and international level, he will support the continued growth of the business to achieve its mid- and long-term strategic goals,” said the company board in a statement.
The board also announced the appointment of Nicolas George as a Board Director of Bamburi Cement Limited and Managing Director of Hima Cement Ltd, Uganda.
The cement maker plans to increase its production capacity from 2.3Mt/yr to 3.3Mt/yr in order to meet market demand in 2018, the first phase of its capacity expansion projects in both Kenya and Uganda. The US$38.5m expansion began in January 2017 with a new mill at its Athi River plant.
President inaugurates US$280m National Cement plant in Kenya
09 February 2018Kenya: President Uhuru Kenyatta has inaugurated National Cement’s US$280m integrated plant in Kajiado County. The clinker plant has a production capacity of 1.2Mt/yr and it set to employ 700 workers, according to the Agence de Presse Africaine. The plant also includes a 15MW captive power plant.
Arabian Cement to increase exports
15 January 2018Egypt: Arabian Cement plans to increase its exports to Africa and Asia. A senior official said the cement producer is considering international expansion amidst strong competition at home, according to Daily News Egypt. At present the company has exported cement to Libya, Yemen, Kenya, Madagascar and Somalia.
Arabian Cement is a joint venture between Spain’s Grupo Cementos La Unión, the majority shareholder, and a group of local investors. It operates a 5Mt/yr cement plant in Suez governorate.
New cement plants in Uganda expected to swamp demand
09 January 2018Uganda: Three new cement plants or upgrades to existing plants opening in 2018 are expected to dwarf local demand. Hima Cement, a subsidiary of LafargeHolcim, plans to open a new 1Mt/yr grinding plant at Nyakesi, Tororo Cement is expanding its plant to 3Mt/yr and Kenya's National Cement is building a plant at Mbale, according to the Ugandan Independent newspaper. Following completion of the three projects local production capacity will rise to 6.8Mt/yr from 3.6Mt/yr. Local demand is 2.4Mt/yr.
Cement industry executives are expecting growth in the construction industry as the government starts infrastructure projects in the oil and gas sector. The cement producers also expect export markets to support local production capacity growth, particularly in South Sudan, western Kenya and eastern Democratic Republic of Congo.
New plants coming to Kenya
21 November 2017Kenya: The founder of Devki Group, Narendra Raval, plans to invest in the construction of a 0.75Mt/yr cement plant in Mariakani, Kilifi County, in direct competition with ARM Cement’s facility in the county. The project, which represents a US$290m investment, will be built on a 20 hectare site. “Construction of a new cement plant will further bring down prices while reducing the long distances lorries must cover to deliver cement to Kenyans on their doorstep,” said Raval, according to Business Daily Africa.
In separate news, Global Choice has concluded plans to build a grinding plant in Athi River, Machakos County. The US$48m facility has a capacity of 1Mt/yr.
Quantum Global sells stake in Savannah Cement
20 October 2017Kenya: Quantum Global has sold its stake in Savannah Cement following approval by the Kenyan Competition Commission. This follows the sale of its stake in Seruji, the Mauritius-based firm that owns a 60% stake in Savannah Cement, according to the Standard newspaper. Quantum Global’s departure gives entrepreneur Benson Ndeta more control over Savannah Cement, which will now own Seruji. Ndeta also holds a stake in Savannah Heights, the other shareholder in Savannah.
Private equity firm Quantum Global has held the asset since 2015 through its US$1.1bn Infrastructure Fund. Savannah Cement started operating in 2012 and it runs a 1.5Mt/yr grinding plant at Athi-River near Nairobi.
Update on Kenya – September 2017
06 September 2017ARM Cement’s declining fortunes this week may signal the end of the current growth cycle in the Kenyan cement industry. The cement producer posted a 20% year-on-year drop in its sales revenue to US$52m for the first half of 2017. Its financial returns have been turbulent since 2015. However, inward investment from the UK’s CDC Group in 2016 had appeared to help the company enabling it to pay of debts and even consider an upgrade project to the grinding capacity at its Athi River plant.
Graph 1: Cement production in Kenya for first half of year, 2013 - 2017. Source: Kenya National Bureau of Statistics.
Graph 2: Cement consumption in Kenya for first five months of year, 2013 - 2017. Source: Kenya National Bureau of Statistics.
Unfortunately it now appears that the Kenyan cement market may have peaked in 2016. As can be seen from Kenya National Bureau of Statistics figures in Graph 1 and 2, production hit a high of 3.31Mt in the first half of 2016 and it has fallen to 3.18Mt for the same period in 2017. Consumption too has fallen, to 2.5Mt for the first five months of 2017. At the same time the value of building plans approved by the Nairobi City Council dropped by 12% to US$1.02bn for the first five months of 2017 with falls in both residential and non-residential applications although the decline in residential was more pronounced. One of the country’s larger infrastructure projects, the Standard Gauge Railway from Mombasa to Nairobi entered its final stage of construction towards the end of 2016 with the completion of track laying.
Bamburi Cement has also reported falling revenue and profit so far in 2017. Its turnover fell by 8% to US$170 and its profit decreased by 36% to US$18m for the half year. Bamburi blamed it on a contracting market, low private sector investment leading to residential sector issues, delays in some infrastructure projects and droughts. The drought also hit the company’s operating profit via higher energy costs. On the plus side though Bamburi’s subsidiary in neighbouring Uganda did record a good performance.
It’s likely that the general election in Kenya in early August 2017 has slowed down the construction industry through uncertainty about infrastructure investment and general fears about political unrest. Thankfully these latter concerns have appeared unfounded so far but the memory of the disorder following the poll in 2007, where over 1000 people died, remains acute. And of course the 2017 election is not over yet following the intervention of the Supreme Court to nullify the result of the first ballot and call for a second. A longer election period with the impending rerun will further add to the pressure on the construction and cement industries.
An industry report on East Africa in February 2017 by the Dyer & Blair Investment Bank fleshes out much of the situation in the region. One particular point it makes though is that, as it stands at present, building materials may be too expensive to grow the market fully. Dyer & Blair suggest that lower construction costs and more affordable home ownership methods might be the key to driving low end housing demands and in turn this might grow cement consumption.
With lots of new production capacity coming online both locally and in neighbouring countries such as Uganda and Ethiopia, the Kenyan cement market faces the dilemma of trying to balance the medium to long-term demographics with the picture on the ground. Low per capita cement consumption suggests growing markets but if the demand isn’t present in the short term then the impetus for cement producers to expand shrivels especially with aggressive imports, rising energy costs and growing local competition. Once the election period finishes the picture will be clearer but the boom times may have abated for now.
ARM Cement revenue down by 20% to US$52m in first half of 2017
05 September 2017Kenya: ARM Cement’s revenue fell by 20% year-on-year to US$52m in the first half of 2017 from US$65m in the same period in 2016. Its loss for the period grew to US$14m from US$2.6m. Cement production dropped by 3.93% to 3.18Mt in the half year of 2017 according to data from the Kenya National Bureau of Statistics reported by the Kenyan Star newspaper. Cement consumption also fell during the first five months of the year, by 2.34% to 2.5Mt.
Janerose Karanja appointed as head of human resources at East African Portland Cement
23 August 2017Kenya: Janerose Karanja has been appointed as the head of human resources at East African Portland Cement Company. Previously, Karanja worked for the Ministry of Industry, Trade and Cooperatives for over 25 years, according to the Kenyan Star newspaper. He holds an MBA in Human Resource Management from Kenyatta University, a human resource professional certificate from the Institute of Human Resource Management and a bachelor's degree in education from the University of Nairobi.
Kenya: Bamburi Cement is set to start a US$39m upgrade to its Athi River grinding plant in August 2017. Preliminary work on the 18-month project started in January 2017 and construction is about to commence, according to the Business Daily newspaper. The upgrade will increase cement production by 0.9Mt/yr at the unit when it is completed in mid-2018. Following the project the cement producer’s total national cement production capacity, including its integrated plant in Mombasa, will reach 3.2Mt/yr.