Africa's cement producers take off.

Author:Ford, Neil
Position:CONSTRUCTION IN AFRICA
 
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The most obvious sign of Africa's construction boom is in the expansion of the continent's cement production capacity. Foreign and domestic companies are pouring money into new production lines in markets as diverse as Angola, Tanzania and South Africa, sometimes in competition with each other but often in the form of foreign-African partnerships.

Several of the biggest players are seeking to roll out continent-wide operations in order to make the most of economies of scale. However, with limited options to export concrete over large distances, comprehensive geographical coverage is likely to become the name of the game.

Almost all of Africa's large cement producers forecast rapid growth in the next few years as a result of continued strong economic growth and a greater public and private emphasis on the provision of infrastructure.

The group executive director of the Nigerian Dangote Group, Devakumar Edwin, said: "Globally, growth in the cement industry in recent years has been largely driven by activities in emerging economies, as the need for housing has continued to grow and government investments in infrastructure have increased. Africa remains the only region in the world with a cement deficit. Demand is expected to be sustained by strong population growth and further investment in infrastructure."

While Chinese companies are becoming increasingly involved in the African construction industry, a range of African cement producers is also growing rapidly.

Mombasa Cement is investing Kshsoom ($3.9rn) in a new grinding plant to boost output to 1.5m tonnes a year (t/y) from 700,000 tonnes last year, while also increasing its market share to 33% by the end of next year.

According to the Kenya National Bureau of Statistics, cement consumption of 327,504 tonnes in January exceeded production for the first time in five years, as the rate of residential construction continued to pick up.

A similar story is being played out in Ethiopia, where national cement production capacity is set to almost double by the start of next year. Shimeles Wolde, the head of the chemical and allied industries directorate in the Ministry of Trade and Industry says that the country should not need to import cement next year. Ethiopia currently produces 7m t/y but consumes 8m t/y and demand is growing because of double-digit economic growth and the country's remarkable dam construction programme.

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The completion of new production lines will boost...

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