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Local cement firms eye own clinker production to cut costs

BUSINESSBy DOMINIC OMONDI | Sat,Sep 25 2021 00:00:00 EAT
By DOMINIC OMONDI | Sat,Sep 25 2021 00:00:00 EAT

 

Workers clean outside the Athi River Mining (ARM) Cement factory in Kaloleni within Kilifi County, December 11, 2013. [File,Standard]

The face of Nairobi has been sculpted over the last two decades by nicely paved highways, its skyline embellished by skyscrapers as they compete to touch the clouds.

And at the heart of this transformation has been a construction binder known as cement, with millions of tonnes produced to give Kenya’s capital city the glow.

One would suppose that many Kenyans have benefited as shiploads of cement are produced to enable this infrastructural make-up. But no.

Among the critical inputs for the production of cement is clinker, a solid material produced in the manufacture of Portland cement as an intermediary product.

Truckloads of clinker have been shipped in from overseas, dealing a blow to the country’s long-term ambition to revamp its manufacturing sector and create jobs.

In the five years to 2020, cement makers spent an annual average of Sh8.3 billion to import 4,439.7 tonnes of clinker from countries such as Saudi Arabia, United Arab Emirates, Egypt and Pakistan.  

The huge importation of the material has also led to the export of many jobs and loss of foreign exchange reserves.

President Uhuru Kenyatta’s government targets to shore up the manufacturing sector to 15 per cent of the gross domestic product as one of the components of the Big Four Agenda, in what is aimed at creating decent jobs through value addition.

Which is why the Kenya Association of Manufacturers (KAM) has proposed an increase in the common external tariff on clinker from 10 to 25 per cent.

It will not be an easy sail. Already, the proposal has elicited sharp reactions from some cement manufacturers, also members of KAM, who argue that such a move will result in unfair competition.

Bamburi Cement, East Africa Portland Cement Company and Savannah Cement are opposed to the increase of import duty.

Also opposed to the proposal are Rai Cement, Karsan Ramji & Sons — manufacturer of Ndovu Cement — and Safari Cement, which is setting up a plant in Mombasa, with the firms arguing that Kenya has no capacity to provide adequate clinker.

While unveiling Simba Cement’s clinker plant in Kajiado in February 2018, President Kenyatta did not hide his enthusiasm that the country would be self-reliant on clinker.

“And Guru (Simba Cement chairman Narendra Raval), when it comes to steel, with your pledge and promise that we shall no longer be importing clinker and steel, I look forward to groundbreaking your plant in Kilifi in the near future,” the president said.

National Cement and Mombasa Cement are also said to be investing in new clinker lines.

Production and consumption of cement has benefited from the massive infrastructural projects being undertaken by the national and county governments.

This has helped push cement consumption to a record high of 4.1 million tonnes in the first seven months of this year, official data shows.

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