The expansion of the plant is aimed at increasing Bamburi’s annual production by 900,000 metric tonnes on completion mid next year.
This will increase the listed company’s annual capacity at Athi River and Mombasa plants to 3.2 million tonnes — which is 50.79 per cent of the country’s annual cement consumption last year.
Kenya National Bureau of Statistics, the national statistician, put Kenya’s cement consumption at 6.30 million tonnes in 2016, a growth of 10.53 per cent over 5.69 tonnes posted a year earlier.
Bamburi Cement #ticker:BAMB is set to start a Sh4 billion expansion of its Athi River grinding plant next month amid growing competition in the industry.
The country’s largest cement maker by market share says it has completed pre-construction preparation for the project.
“In January we embarked on this 18-month project to construct a new cement grinding line at Athi River, and with civil works currently underway, structural work is set to commence next month,” managing director Bruno Pescheux said in a statement yesterday.
The expansion of the plant is aimed at increasing Bamburi’s annual production by 900,000 metric tonnes on completion mid next year.
This will increase the listed company’s annual capacity at Athi River and Mombasa plants to 3.2 million tonnes — which is 50.79 per cent of the country’s annual cement consumption last year.
Kenya National Bureau of Statistics, the national statistician, put Kenya’s cement consumption at 6.30 million tonnes in 2016, a growth of 10.53 per cent over 5.69 tonnes posted a year earlier. This was against 6.71 million tonnes produced, the KNBS data shows, which was 5.84 per cent higher than 6.34 tonnes in 2015.
Consumption in the first two months of the year went up by a marginal 0.97 per cent to 988,690 tonnes from 979,132 tonnes in the January-February period of 2016, the latest KNBS data shows.
Sterling Capital, in a report on the cement industry, warned last month that ongoing capacity expansion and construction of new plants is likely to result in oversupply. “Grinding utilisation capacity is likely to fall from 65 per cent to 50 per cent by full-year 2018, meaning there will be more idle capacity,” Sterling Capital’s head of research Eric Munywoki said in the report.
The report said average return on investment for the industry in the past five years on compounded annual growth rate basis was one per cent against the Nairobi All Share Index average of 13.6 per cent.
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