Features Cement consumption in Kenya and Tanzania to increase on the back of mega infrastructure projects 14 December, 2020 SHARE THIS ARTICLE Share Tweet Post Email LATEST Environment Heidelberg's Burglengenfeld plant invests EUR 230 million Major environmental shift at Burglengenfeld June 14, 2024 Markets & Competition Bamburi Cement extends loan to its subsidiary Cement giant provides significant funding to boost June 14, 2024 MOST READ Environment Holcim Philippines eyes recycling 10M tons of Holcim Philippines aims to recycle demolition wastes by June 07, 2024 Markets & Competition Holcim and Norman Foster Foundation unveil sustainable Sustainable homes will utilize Holcim's EcoPlanet June 12, 2024 Cement consumption in Kenya and Tanzania to increase on the back of mega infrastructure projects Two small, but growing cement markets in East Africa are expected to witness an increase in demand over the next five years. Kenya's cement demand is estimated to surpass 7 million tons over the next five years, while the cement demand in Tanzania is expected to reach over 8 million tons by 2025, both boosted by an increase in infrastructure investment, according to CW Research's 2020 updates of the Kenya Cement Market Report and Tanzania Cement Market Report. Both African neighbors are highly dependent on agriculture, however, they are anticipated to see growth in cement consumption over the next five years, since the Kenyan and the Tanzanian governments have several infrastructure projects scheduled for the period, with total investments exceeding USD 41 billion and USD 51 billion, respectively. In Kenya, one of the major infrastructure projects is the Konza Technology City, with an investment of USD 14.5 billion, while in Tanzania, as part of their Development Vision 2025, there is the ongoing Standard Gauge Railway phase I & II project, with an investment of USD 14.2 billion. Despite the similarities, demand in both markets is likely to grow at different paces. While Kenya's cement demand is estimated to increase at a CAGR of more than 3 percent, Tanzania is expected to grow at a CAGR of 5 percent. "Even though both markets are relatively small, mega infrastructure projects are expected to be the main driver of consumption in the next five years. However, in order for the manufacturers to boost exports and remain competitive, it is crucial that authorities take measures for production costs to remain under control", observes Juliana Vieira, Business Analyst at CW Group. Infrastructure spending and exports as main drivers for production growth Not only is government investment anticipated to drive cement consumption growth in both markets, as is the focus of manufacturers in both countries to export cement to African neighboring countries, including the Democratic Republic of Congo and Rwanda. Regarding cement exports, including clinker, figures are still modest, but they are expected to increase not only due to the government focus on taking advantage of existing overcapacity but also cement players' efforts to boost exports. In Tanzania, cement exports are projected to more than triple by 2025F. In Kenya, volumes are likely to increase significantly by 2025F, at a CAGR of 9.6 percent, maintaining the country's position as a net exporter. Despite oversupply, additional capacities are expected to come online in the next five years in both countries Even though both markets are presently experiencing an oversupply in capacity, additional capacity is expected to surge in the upcoming years. Currently, in Kenya's cement industry, around 3 million tons of new capacity is expected to be added until 2025F. Meanwhile, Tanzania's production capacity is estimated to grow at a faster pace, with around 5 million tons of new capacity expected to be added by 2025F. The Kenya Cement Market Report and the Tanzania Cement Market Report provide qualitative and in-depth market assessment and forecast of the country's cement industry, including cement volume trends in detail, trade flows, cement demand and production (historical and a five-year outlook), per capita consumption, and the competitive landscape. The report also comprises key players profiles, cement production facility details, including past and announced brownfield production increases and greenfield projects. Find out more about the reports here for Kenya, and here for Tanzania. Sign in Don't have any account? Create one SHOW Forgot your username/ password? 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