The governments in East Africa are devoting vast resources towards infrastructure development in the region, especially urban housing and transport infrastructure.
Kenya for example has launched a multi-billion shillings Lamu Port project that will include a new port, a superhighway and a railway line connecting Kenya, South Sudan and Ethiopia as well as three resort cities in Lamu, Isiolo and Lokichoggio near Lake Turkana.
The newly created Republic of South Sudan has, on the other hand, embarked on massive infrastructure development including housing, roads and railway as political stability in the country revives investment interest.
Tanzania, Uganda, Rwanda and Burundi are also investing heavily to contain the huge deficit in infrastructure, particularly commercial buildings, housing and transport infrastructure, including rails and highways.
According to pan-African consulting and market research company Frost & Sullivan (F&S), these construction activities present an opportunity for steady growth in cement consumption in East Africa.
Speaking last week during an online briefing which highlighted fundamental factors expected to impact on cement growth in East Africa, F&S research analyst Charles Shonayi said the regional consumption is likely to grow by a compound annual growth rate of 7.9 per cent by 2017.
“Cement demand in East Africa is expected to remain strong in the medium term buoyed by the resurgence in housing sectors, rising infrastructure development and reconstruction in South Sudan and the DRC,” said Mr Shonayi.
Kenya is the largest market for cement in East Africa, with annual production representing 53 per cent of the region’s total capacity, followed by Tanzania and Uganda whose production represent 30 per cent and 15 per cent respectively.
However, despite the anticipated growth in the regional cement demand, cement makers may not gain much unless they devise ways to mitigate the challenges currently facing them such as high cost and irregular supply of electricity and raw materials as well as high distribution costs and the influx of cheap imports.
“Cement producers must implement sustainable cost management measures ‘focusing on low-cost technology, alternative fuels and value adding models’ to remain competitive,” said Mr Shonayi.
