Demand for bitumen, a highly viscous black thick substance used for waterproofing and as an adhesive in road construction, is expected to rise thanks to the many planned and ongoing construction activities.
According to recent projections by industry analysts, bitumen use in 2011 will rise to over 16,000 metric tonnes due to the government’s decision to increase budgetary allocation to road construction activities.
In the 2011/2012 budget, Finance Minister Uhuru Kenyatta increased the budgetary allocation for the Ministry of Roads from Sh90.2 billion to Sh100.9 billion for construction and maintenance of major roads in the country.
Bitumen dealers say the demand for bitumen prior to 2004 was very low as the government was not investing significantly in road construction.
The situation has however changed drastically, and dealers say the outlook for the next five years is positive due to the devolved government system that promises increased construction activities in the counties.
“Demand for bitumen is growing upwards as there is a lot of road construction, both planned and ongoing,” says Sami Ismail, the Managing Director of Bitu-Bulk Handlers (EA) Ltd, a bitumen dealer who controls 50% market share by stock.
The average price of bitumen in Kenya is US$670 to US$ 690 per metric tonne.
Other firms involved in selling bitumen include Total, KenolKobil, Shell, Engen and Pan African Petroleum.