Local cement firms have been forced to cut production to a four-year low following a contraction in demand.
Following the completion of major construction projects like the standard gauge railway, a struggling property market and geopolitical uncertainties in export markets have resulted in a gradual fall in the level of consumption since 2016.
“Government spending on infrastructure has gone down and we also witnessed slow-down in the SGR project,” said East African Portland Cement Company (EAPCC) acting managing director Stephen Nthei told Business Daily.
“We also export cement to countries that have been hit by political instability like South Sudan and the Democratic Republic of Congo. Consumption in such countries went down, so our production has had to come down,” Mr. Nthei.
Cement firms produced 5.37 million tonnes in the 11 months to November, a three percent drop from 5.54 million tonnes for 2018.
Major cement companies have faced hard times in recent times. ARM cement, for instance, fell into administration while Bamburi Cement issued its first profit warning in 10 years while.