Kenya-based National Cement is set to invest Sh18.5 billion ($199 million) in a new factory in Uganda. This will be its first foray into Uganda and more importantly its first plant outside Kenya.
The plant will be operational by the end of next year and will have an annual capacity of one million tonnes.
National Cement’s strategic move might have been motivated by news that Dangote is coming to town.
The billionaire cement manufacturer is set to begin construction of a plant in Kitui, the largest urban centre in Kenya. Dangote is poised to swiftly displace local competition with three million tonnes per annum.
Other top-tier competitors are also moving into East Africa. Indian conglomerate Cemtech and ARM Cement are also considering setting up new plants in Pokot and Kitui areas respectively.
This signals a heightened competition for National Cement as the region’s cement industry is expected to play host to more price wars and oversupply.
The Standard Investment Bank (SIB) has forecast that excess capacity expected to remain above 20% through to 2016.”
National Cement’s entry into Uganda will put it in direct competition with Lafarge’s Hima Cement and Tororo Cement, the leading cement producers in the country with a combined capacity of 3.6 million tpa.
It also faces further competition from Egypt, Pakistan and Kenya where Uganda currently imports extra cement.
