Cement consumption at historic high on projects

Cement consumption in Kenya rose to an all-time high of 726,823 tonnes in July, a new report shows, buoyed by the construction of mega infrastructure projects.

Official data by the Kenya National Bureau of Statistics (KNBS) shows that the intake was highest since the available recorded data of 2010.

Commodity demand forced factories to increase production to 741,647 metric tonnes, which was the highest in over 10 years.

Construction of mega-public projects such as the 27.1km Nairobi Expressway, the upgrade of James Gichuru – Rironi highway, the dualling of the Kenol-Marua road, the Nairobi Western Bypass, and the affordable housing projects have boosted cement usage in the country this year.

Other construction projects are Mombasa’s Dongo Kundu bypass, the Eldoret bypass, and the Lamu Port.

“Cement production has been strong, aligned with consumption of the product. This has been supported in part by the strong government infrastructure spending,” the Central Bank of Kenya (CBK) governor Patrick Njoroge said during a briefing on the July 26 monetary policy committee (MPC) meeting.

In the seven months of the year, 2021 Leading Economic Indicator also shows that consumption increased by 22.58 percent to 4.78 million metric tonnes in the first six months of the year from 3.897 in a similar period last year.

Real estate sector recovery also drove up the consumption, coming on the back of tough lockdown measures that weighed down on the sector last year after investors froze new projects owing to Covid-19’s uncertainties.

For example, the Central Bank of Kenya (CBK) data showed the loan book to the building and construction sector expanded to Sh121.7 billion in May from Sh116.4 billion in the same period last year.

According to the Architectural Association of Kenya, improvement in the sector is pegged on economic recovery, with Kenya projected to record growth of up to six percent this year.