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Economy

China exports Sh2bn cement to Kenya in first half of year

Workers at the East African Portland Cement Company factory. PHOTO | FILE
Workers at the East African Portland Cement Company factory. China grew its cement exports to Kenya tenfold in the first half of the year even as contractors of flagship projects continue to deny shipping materials available locally into the country. PHOTO | FILE 

China grew its cement exports to Kenya tenfold in the first half of the year even as contractors of flagship projects continue to deny shipping materials available locally into the country.

Data prepared by the Kenya National Bureau of Statistics (KNBS) shows that China exported Sh2.2 billion worth of cement to Kenya in the first six months of the year compared to Sh201.6 million in a similar period of 2015.

The huge cement import bill is set to put Chinese contractors on the spot, having recently insisted that they only bring in machinery and equipment for Kenya’s mega projects.

The KNBS data indicates that portland, aluminous and slag brands of cements were imported from China in the last six months.

Chinese contractors control the majority of Kenya’s multi-billion shilling infrastructure projects, among them the standard gauge railway, highways, ports and real estate.

China Road and Bridges Corporation (CRBC) holds the priciest contracts in Kenya — the construction of the Sh327 billion Mombasa-Nairobi standard gauge railway — expected to be completed early next year.

Local manufacturers have, however, complained of being left out of the railway project, accusing CRBC of importing raw materials and ferrying in Chinese labourers for the works.

Dropped significantly

The CRBC has in the past dismissed the claims, saying it sources all its construction materials from local firms and only imports machinery, equipment and locomotives that are not available in Kenya. The firm says it is supplied with cement by local firms Bamburi Cement, East African Portland Cement, ARM Cement and Savannah Cement.

The Chinese cement import growth comes in a period when prices in Kenya have dropped significantly on the effect of increased imports and expansion by established and new players, creating excess supply.

Official data shows that local firms produced 3.2 million tonnes of cement in the year to June against a consumption of 2.9 million tonnes, leaving a surplus of 300,000 tonnes. The average retail price of a 50-kg bag of cement has dropped to Sh670 from the peak of Sh740 in 2008 due to fierce price war.

Nigeria’s Dangote Cement, owned by Africa’s richest man Aliko Dangote, is set to start feeding the Kenyan cement market through imports from its plant in neighbouring Ethiopia.

The imports precede Dangote’s plans to eventually establish a manufacturing plant in Kenya. The Dangote Cement is set to be 40 per cent cheaper than locally manufactured brands.

Other Chinese firms in Kenya include China Jiangxi which is constructing Kenya’s Sh5.8 billion Parliament Tower — a 26-storey office complex for MPs. China Wu Yi is putting finishing touches to a 22-storey complex at the University of Nairobi.

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