Increased freight charges slapped on importing coal and clinker have reinforced the case for local production to shield cement manufacturers from steep costs that have kept cement prices on the roofs.
Onset of Covid-19 elevated charges as importers of commodities such as coal, clinker and steel compete for airline spaces with transportation of health essentials such as personal protective equipment, masks and vaccines.
Bamburi Cement is among companies that have felt the impact of increased freight charges and expects them to remain high going into next year.
"We have seen costs increase on input products such as coal and imported clinker mainly driven by higher freight charges," said Seddiq Hassani, Bamburi Cement chief executive in an earlier interview with Smart Business.
"There is very high demand for freight services, especially for Covid-19 supplies and so the rates for freight have increased," he said.
Clinker
Yet, demand for clinker–a key ingredient in manufacturing of cement– has continued to increase in line with rising demand for the building material, reinforcing the need for relying on the local market to save costs and dollar reserves.
Kenya last year imported 2.008 million tonnes of clinker, up from 1.81 million tonnes in 2019, setting a new high for the country as Egypt and United Arab Emirates accounted for 92 per cent of the sourced commodity for Kenyan companies.
The value of this clinker was Sh8.65 billion, compared with Sh8.38 billion spent in the preceding year. The price per tonne of imported clinker has averaged Sh4,440 in the last five years.
Calls for attention to local clinker are once more coming into focus given that Kenya has four clinker production plants with a combined annual capacity of about eight million tonnes.
The annual output contrasted with imports of under two million tonnes in the last five years, means that Kenya can comfortably stop importing this crucial commodity and rely on local produce.Only Bamburi’s clinker was operating at full capacity by last year in contrast to East African Portland Cement (30 per cent), Mombasa Cement (60 per cent) and National Cement–a member of Devki Group of Companies– (70 per cent).National Cement plant churns out three million tonnes of clinker per year being about 1.5 times the volume of clinker imported into the country every year."Kenya’s missing link is that it takes a lot of time [to pass policies]. It has a lot of bureaucracy. There is sufficient clinker and we should not be importing," […]
