Materials & Supplies

Kenya Cement Exports to EA Fall as China Floods Market

Exports to East Africa dropped by 38.3 per cent to 420.4 thousand tonnes in 2016.

Updated on

May 18, 2017

Dangote cement factory — Local manufacturers export 40 per cent of their cement. PHOTO | FILE

These are tough times for Kenyan cement manufacturers as cheaper imports from Asia continue to slow down their exports to the East African region.

According to the Economic Survey 2017, which was released last month by the Kenya National Bureau of Statistics (KNBS), total cement exports to East Africa dropped by 38.3 per cent to 420.4 thousand tonnes in 2016, which was the lowest export in the last four years.

Cement exports to Uganda and Tanzania declined to 325.0 thousand tonnes in 2016 from 487.4 thousand tonnes in 2015.

Exports to all other countries apart from Uganda and Tanzania dropped to 95.4 thousand tonnes last year from 194.2 thousand tonnes in 2015.

“Uganda was the largest market for Kenya’s exports, accounting for 11.3 per cent of total export earnings, followed by Tanzania, which accounted for 5 per cent of total export earnings in the third quarter of 2016,” the KNBS said in a statement.

Although the drop is largely attributed to encroachment in strategic market segments by Asian products, local factors like taxation, new competing industries in export markets and instability in South Sudan have contributed to the slowdown of exports.

Cement from China, India and Pakistan, some of the inferior quality, has flooded the regional market, threatening to drive local manufacturers out of business.

Dangote Cement, which recently started producing cheaper cement in Ethiopia and Tanzania, has also grabbed a huge chunk of the Kenyan cement manufacturers’ regional market.

Kenya relies on Africa to absorb more than 40 per cent of its manufactured cement.

The KNBS data shows a 30 per cent drop in exports to Uganda to $152.1 million in the period under review, from $228.18 million over the same period in 2015.