Bamburi sees cement demand rising 2021

Bamburi Cement #ticker:BAMB is projecting a strong demand next year on increased home construction and execution of key government projects such as the Sh65.5 billion Nairobi Expressway.

Managing Director Seddiq Hassani says the cement-maker has seen a recovery in demand for cement from June, nearly hitting the level seen before Covid-19 economic disruptions set in mid-March.

He expects the recovery to be sustained in 2021 especially with other government projects such as Ruiru II dam and Sh160 billion toll highway from Nairobi to Mau Summit also planned in the same year.

“In the second half of 2020, we have seen a stronger recovery. We are almost back to the pre-Covid-19 levels especially on individual homes projects,” said Mr Hassani.

“We see the trend sustaining in 2021. We are talking about some big government projects that are planned for 2021 and that adds to our optimism.”

His positive outlook comes on the back of official data showing that cement consumption recovered from 506,800 tonnes in April to 607,383 tonnes in October— the highest consumption in a single month in more than a decade.

Mr Hassani said that many individuals who made savings on expenses such as school fees enjoyed liquidity boost and embarked on renovations and construction of new homes.

This was further helped by the State decision to cut tax on salaries and purchased goods to boost money in people’s pockets. Another boost came from renovation of the meter gauge railway line.

“We have seen big projects being restarted or accelerated. This has boosted the cement consumption,” said Mr Hassani.

Mr Hassani expects people and companies seeking loans for construction projects to see increased access to credit, with rate caps having been lifted last year November.

Cement sector remained relatively unaffected by restrictions on movement into and out Nairobi and Mombasa, dusk to dawn curfew and bans on public gatherings that hit most sectors of the economy.However, Bamburi felt the impact of Kilifi lockdown where many quarries were closed, causing shortage of stones and subsequently slowed cement demand as construction works paused.Bamburi posted 83 percent jump in net profit to Sh721 million in the half year ended June.The sharp rise in earnings was partly on account of Sh508 million tax saving after government revised corporate tax from 30 percent to 25 percent to soften the economic blow of coronavirus.

Stay in the Know!

Sign up for the latest news and information on African Companies and Economy.

By signing up, you agree to receive MoneyInAfrica offers, promotions and other commercial messages. You may unsubscribe at any time.

Leave a Reply